SAC Capital refutes allegations against Steve Cohen

Hedge fund firm SAC Capital Advisors gave its employees a 46-page rebuttal to U.S. government allegations that Chief Executive Steven Cohen failed to take effective measures to prevent insider trading, CNBC confirmed.

The Wall Street Journal originally reported on the rebuttal.

The newspaper said the firm's lawyers had prepared the memo in response to the U.S. Securities and Exchange Commission civil enforcement action on Friday against Cohen.

(Read more: Bull's-eye! SEC pins charges on SACCapital's Cohen)

Steve Cohen, Chairman and CEO of SAC Captial Advisors LP.
Scott Eelis | Bloomberg | Getty Images
Steve Cohen, Chairman and CEO of SAC Captial Advisors LP.

In its order, the SEC detailed how it believes Cohen turned a blind eye to what it called illegal trades by two of his portfolio managers.

The SAC Capital memo, distributed to employees on Monday, called the allegations against Cohen "baseless," the newspaper reported.

The SEC is seeking to bar Cohen from managing other people's money, though still unclear if it will seek a lifetime ban or for a shorter duration.

(Read more: Steve Cohen and the Hamptons pool defense)

In March, SAC Capital agreed to pay a record $616 million penalty to settle a separate SEC lawsuit arising from an investigation of trading on illegal information.