The regulatory agency is putting together a system, called the Consolidated Audit Trail (CAT), capable of tracking trades in near-real time. But that is at least three years away according to the bid schedule. It is unknown if such a system could have detected the huge moves by SAC Capital in July 2008.
The SEC declined requests for comment from NBC News, but pointed to the agency's website for the information on CAT as well as the SEC's charter, which requires it to "protect investors, maintain fair, orderly, and efficient markets, and facilitate capital formation."
That mandate puts the agency in the difficult position, observers note, because it has to encourage innovation — such as the use of dark pools — while simultaneously protecting investors from being at a disadvantage as a result of such systems.
Insider trading by all hedge funds has been under scrutiny since August 2009, when Preet Bharara took over for the U.S. Attorney's Office for the Southern District of New York.
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Since then, 76 people have been charged with the illegal act of buying and selling stock based on information from insiders, with 71 convicted, according to the U.S. Attorney 's Office.
While the toll of insider trading is difficult to establish, plaintiffs in the class-action lawsuit against Cohen and SAC say their case shows that the practice punished both ordinary investors and other institutions that aren't in the know.
In going after Cohen and SAC, they are targeting one of Wall Street's savviest traders.
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Cohen is worth nearly $9 billion, according to published reports. Despite his massive art collection, 36,000 square foot home, and enormous wealth Cohen maintains a relatively low profile, rarely granting interviews.
"In speaking to Steve Cohen you wouldn't necessarily know that he has one of the greatest track records as an investor over the last 15 or 20 years and that he's one of the richest men in the country, said CNBC's David Faber, "He's fairly understated, he's far from a recluse, he has plenty of friends and is extraordinarily competitive."
But Kreier, one of the plaintiffs in the lawsuit, said he has no compunctions about going after such a prominent player, given the high price he paid for his investment in Elan. Because he had no idea SAC Capital was dumping hundreds of millions of dollars of stock and even short-selling Elan through the dark pools, he said his confidence in the stock market is shot.
"You don't stand a chance," he said. "You buy a stock, you're better off buying a lottery ticket."