A laundry list of referrals about trading at SAC Capital have shed new light on the firm's opportunistic bets but also illustrate why regulators are having a tough time making allegations of insider trading stick against one of the world's biggest hedge funds.

In the last three years, Finra, Wall Street's self-regulatory body, has sent 903 referrals of possible insider trading to the Securities and Exchange Commission, a spokeswoman said.

Among them were dozens of cases of suspicious trading at SAC Capital Advisors, said people familiar with the matter who are not allowed to discuss it publicly. One of the referrals centers on trading in Red Robin Gourmet Burgers Inc .

Over the last months, Sen. Charles Grassley, the top ranking Republican on the Senate Judiciary Committee, has complained that the SEC has not said what it has done about some 65 referrals of potential problems at SAC.

Sometimes referrals about an individual or entity will increase because we ask SROs to refer all suspicious activity by traders already under SEC investigation, SEC spokesman John Nester said, declining to comment specifically about SAC.

Since SAC trades in thousands of securities every day and once made up as much as 4 percent of the daily volume on the New York Stock Exchange, it is not surprising that its name comes up in the Finra referrals, industry experts noted.

COOPERATED FULLY

These referrals, however, are based on limited information as no one at Finra has ever contacted the firm, spoken with our investment professionals, or reviewed our research in connection with these matters, a SAC spokesman said.

SAC said that it has always cooperated fully with any government inquiries and noted that Finra's referrals to the SEC are neither allegations nor findings of improper activity.

To date, neither the $14 billion fund nor its founder, Steven A. Cohen, one of the hedge fund industry's most closely watched traders, has been accused of any wrongdoing.

Considering the number of bets SAC makes every year, it may be especially tough to charge that the firm used improper information to trade, people familiar with the matter said.

A Finra spokeswoman declined to comment on this matter and the SEC spokesman declined to comment on specific referrals.

Reuters reported earlier this year that there has been a growing consensus among prosecutors and regulators that it might be extremely difficult to make a case against Cohen himself or his firm.

BILLIONS OF TRADES REVIEWED

The Financial Industry Regulatory Authority reviews billions of trades a day and routinely alerts the Securities and Exchange Commission to what may be suspicious trading activities at hedge funds and other companies.

Trades can attract regulators' attention particularly if they are made shortly before a takeover, critical announcement about a drug or a patent or some other market moving event.

The U.S. government has spent years looking at how hedge funds may be relying on inside information to make these lucrative bets, and in the last months the U.S. government has secured dozens of guilty pleas and convictions.

As part of the probe, federal investigators have been looking into allegations of wrongful trading at SAC for about four years, Reuters previously has reported. Several former SAC employees have been netted in the probe.

Donald Longueuil, a one-time SAC portfolio manager, was sentenced to 2-1/2 years in prison for insider trading and his former colleague Noah Freeman pleaded guilty to using inside information to make trades.

(Additional reporting by Sarah N. Lynch in Washington; Editing by Matthew Goldstein and Steve Orlofsky)

Insider trading