But any new investment vehicle set up by Mr. Cohen would still need Wall Street. And the banks would have to decide whether they wanted to do business with him.
"His money will be just as green after this indictment as it was before," said Jonathan R. Macey, a law professor at Yale.
So far, SAC Capital's problems have not weighed on the wider market. If a large financial firm becomes unstable, regulators often worry that it will dump its assets, setting off a fire sale. Smelling blood, other investment funds may also bet against those shares to make a profit.
But some of SAC Capital's previously disclosed investments were holding up well on Thursday. For instance, recent filings showed that SAC Capital owned a big stake in GNC Holdings, the retailer of vitamins and health products. Its stock was up over 10 percent on Thursday after reporting earnings.
One wild card is whether SAC Capital has been using margin, or borrowed money from its brokers, to make its biggest bets. If a Wall Street bank demanded those loans be paid back immediately, the fund could face trouble.
(Read more: Bharara on SAC: Illegal trading spanned a decade)
SAC Capital's assets look relatively small when placed in the context of the wider market. Hedge funds — which manage money on behalf of college endowments and pension funds as well as the wealthy — as a whole have $2.4 trillion of assets under management, according to Hedge Fund Research. Mutual funds have $28 trillion of assets, according to the Investment Company Institute.
But SAC Capital's frantic trading made it a much bigger source of earnings for Wall Street than investment companies that were many times its size.
SAC Capital's indictment could serve as a reminder to Wall Street and investors not to grow too dependent on funds that pursue aggressive strategies. Assets at hedge funds have grown even though they have generally underperformed in the market. SAC Capital's high profile problems could do even more to take the gloss off the sector.
"Hedge funds were touted as being smarter than everyone else," Mr. Geisst said. "I think this marks something of an end to that era of hedge funds."
—By Peter Eavis of The New York Times