The viability of SAC Capital Advisors as a large hedge operations was undercut by evidence that probably will show more traces of illegal behavior at the firm. Clients supposedly have started to pull out money of fear of future trouble at the company controlled by Steven A. Cohen.
According to The Wall Street Journal:
A former analyst at SAC Capital Advisors told federal criminal investigators that he was pressured by his manager to gather inside information on technology stocks, according to people familiar with the briefing.
The Federal Bureau of Investigation and the Manhattan U.S. Attorney's office now are using the statements from the analyst to try to build a case against the SAC portfolio manager, Michael Steinberg, and others that could result in charges in the coming months, these people said.
Authorities currently are preparing to present evidence to a grand jury against Mr. Steinberg, according to a person familiar with the investigation.
The development ramps up the legal pressure on the big hedge fund, highlighting that the previously reported insider-trading investigation of SAC and its founder, Steven A. Cohen, is proceeding on multiple fronts.
Filed under: 24/7 Wall St. Wire, Law