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

The Securities and Exchange Commission said on Friday that it has filed a civil action against billionaire hedge fund manager Steven A. Cohen, accusing him of failing to supervise two employees who made insider trades.

The founder of hedge fund SAC Capital Advisors LP "received highly suspicious information that should have caused any reasonable hedge fund manager to investigate the basis for trades made by two portfolio managers who reported to him -- Mathew Martoma and Michael Steinberg," the SEC said in a statement. "Cohen ignored the red flags and allowed Martoma and Steinberg to execute the trades."

The charges come amid a long-running investigation of Cohen and his $15 billion hedge fund by regulators and federal investigators. The SEC said that it will seek to bar Cohen from overseeing investor funds in the future.

In a statement, Stamford, Conn.'s SAC Capital said that the SEC's case "has no merit."

"Steve Cohen acted appropriately at all times and will fight this charge vigorously. The SEC ignores SAC's exceptional supervisory structure, its extensive compliance policies and procedures, and Steve Cohen's strong support for SAC's compliance program," the statement said.