Federal regulators filed a civil action against Steven A. Cohen on Friday, blaming him for "failing to supervise" employees accused of insider trading.
The regulatory action, filed by the Securities and Exchange Commission, delivers a serious blow to Mr. Cohen, the billionaire owner of SAC Capital Advisors. The agency is seeking to bar Mr. Cohen from overseeing investor funds, a death knell to a hedge fund manager.
Yet the order, filed as an S.E.C. administrative proceeding rather than lawsuit, stops short of accusing him of fraud. Instead, the S.E.C.'s action focused on a breakdown in controls at the fund, once one of Wall Street's best performers.
"Hedge fund managers are responsible for exercising appropriate supervision over their employees to ensure that their firms comply with the securities laws," Andrew J. Ceresney, co-head of the S.E.C.'s enforcement division, said in a statement. "After learning about red flags indicating potential insider trading by his employees, Steven Cohen allegedly failed to follow up to prevent violations of the law."
The action comes several months after SAC agreed to settle charges with the S.E.C., paying a record $615 million. It also comes as federal prosecutors and the F.B.I. continue to investigate the fund.
In a statement, a spokesman for SAC argued that the S.E.C.'s case "has no merit," adding that Mr. Cohen "acted appropriately at all times and will fight this charge vigorously."
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