A federal grand jury in New York recently returned a 41-page indictment charging securities and wire fraud against SAC Capital, a hedge fund run by reputed billionaire Steven A. Cohen. Prosecutors said the indictment was the culmination of a longstanding investigation and crackdown against insider trading. SAC, based in Connecticut, reportedly has about 1,000 employees throughout the world.
It remains to be seen what the government can prove against the company. However, acts of fraud can only be carried out by people. Cohen has not been indicted, although he faces civil charges brought by the Securities and Exchange Commission accusing him of failing to supervise employees suspected of insider trading. The SAC indictment is reminiscent of other significant corporate indictments which in the past have served to destroy major companies, such as the accounting firm Arthur Andersen, where some 28,000 people lost their jobs.
