SAC Capital has been indicted on criminal charges by a Manhattan grand jury on Thursday after officials said one of Wall Street’s largest hedge funds “not only tolerated cheating, it encouraged it.”
Founder Steven Cohen was not individually charged, but his Connecticut-based company was charged with wire fraud and four counts of security fraud.
“This is a case about corporate conduct and corporate responsibility,” FBI Assistant Director George Venizelos said in a statement ahead of Thursday’s 1 p.m. EDT press conference in New York. “SAC Capital and its management fostered a culture of permissiveness.”
A former SAC portfolio manager, Richard Lee, already pled guilty in a years-long investigation, the Manhattan U.S. Attorney Preet Bharara’s office said.
Bharara said the company “failed to police itself” but added that its assets have not been frozen.
He said the company may remain open if it is convicted.
But the suit will no doubt damage SAC’s reputation and may cripple the firm.