On Friday, lawyers for SAC Capital entered a not guilty plea to the charges. Some in the hedge fund industry said a fierce determination to carry on business as usual was behind Cohen's decision to go ahead with the bash at his 9,000-square-foot home on a street famed for its waterfront mansions.
Cohen, whose estimated fortune is $9 billion, set up shop in 1992 with just $25 million and earned a reputation as of the greatest stock traders of his generation. His firm has posted a 25 percent average annual return, one of the best performance track records in the $2.4 trillion hedge fund industry, despite charging investors some of the highest fees.
SAC Capital, after the indictment was announced, sent an email to employees and investors saying the firm would operate as normal. It stressed that prosecutors did not intend to take any action that would imperil the firm's ability to return some $4 billion in outside investor money by year's end.
Rare Move Raises Questions
It's a rare move for federal prosecutors to indict a corporation, and it remains to be seen just how long Wall Street banks that lend money to SAC Capital and trade with it, will continue to do.
It also remained to be seen whether Cohen, who faces no criminal charges himself, can keep his hedge fund empire together as a fully functioning firm employing nearly 1,000 people, with offices in eight cities around the globe.
(Read more: Prosecutors seek 'any and all' SAC assets)
And it was unclear whether Cohen's more than 500 investment professionals, traders and analysts, will remain with the firm as the criminal proceeding unfolds. Investors have asked to withdraw most of the $6 billion in outside money the fund managed at the beginning of the year.
"I would be running for the hills and looking for a job now if I were an SAC employee" said Mark Jordan, a veteran wealth management recruiter. "Who in their right mind would put money in SAC again?"
A review of LinkedIn profiles for more than a dozen SAC employees revealed that some have been connecting through the online networking site with Wall Street job recruiters.
Up until recently, headhunters had said they were not seeing a flood of resumes from SAC employees, even after U.S. securities regulators filed a civil administrative complaint against Cohen on July 19 for failing to supervise two employees charged by prosecutors with insider trading.
As of early last week, SAC Capital was still interviewing candidates for clerical positions and junior trading and analyst jobs, according to headhunters and an SAC Capital employee, who declined to be identified.
On July 23, the firm posted a job opening on its website to fill a position in its 15-member controller's team, which is responsible for analyzing the firm's daily profits and losses from trading hundreds of stocks and bonds.
(Read more: SAC CaseThreatens a Wall Street Cash Cow)