DOJ expects to charge SAC Capital on Thursday: source

Wed Jul 24, 2013 6:46pm EDT
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By Matthew Goldstein and Emily Flitter

NEW YORK (Reuters) - Federal prosecutors are continuing to look for ways to build a criminal case against billionaire trader Steven A. Cohen at the same time as they prepare to announce criminal charges against his hedge fund on Thursday, people familiar with the investigation said.

Charges of securities fraud and wire fraud expected to be filed against the company, according to a source familiar with the investigation.

The charges against Cohen's $15 billion SAC Capital Advisors come after nearly seven years of investigations of his firm on allegations of insider trading.

Authorities do not plan to charge Cohen with any criminal wrongdoing, said the source.

A spokeswoman for Manhattan U.S. Attorney Preet Bharara declined to comment as did a spokesman for the Federal Bureau of Investigation.

A spokesman for SAC Capital also declined to comment.

The filing of a criminal charge against SAC Capital could be a death-knell for the Stamford, Conn.-based firm that employs nearly 1,000 people and made billions for the 57-year-old Cohen.

It is likely that Wall Street firms that lend money and trade with SAC Capital would stop doing so after a criminal charge is filed. However, since more than $15 billion of the firm's assets represents money for Cohen and his employees, SAC Capital has substantial resources to continue functioning.   Continued...

Hedge fund manager Steven A. Cohen, founder and chairman of SAC Capital Advisors, listens to a question during a one-on-one interview session at the SkyBridge Alternatives (SALT) Conference in Las Vegas, Nevada May 11, 2011. REUTERS/Steve Marcus