U.S. News

SAC May Face Civil Charges in Insider Trading Probe

Scott Eells | Bloomberg | Getty Images

SAC Capital, the hedge fund embroiled in an insider-trading investigation, is facing possible civil charges from federal regulators, according to someone briefed on a conference call with investors Wednesday.

SAC told investors it received a from the Securities and Exchange Commission last week indicating that the regulator's staff was recommending filing civil charges against the SAC Capital Advisors, the firm's parent company.

The possible charges are in connection with the insider-trading allegations made last week against a former trader, Mathew Martoma, and the SAC subsidiary he worked for, CR Intrinsic.

In the same call, managers said that while they are confident that the firm's selloff of two pharmaceutical positions several years ago was appropriate, they are nonetheless revisiting their compliance protocols to see if further improvements might be needed, according to someone who was briefed on the discussion.