Updated, 7:59 p.m. | Federal regulators on Thursday announced the latest case to stem from the decade-long insider trading investigation into SAC Capital Advisors, taking aim at a former employee for prompting a number of illegal trades.
Ronald N. Dennis is the 10th former employee of SAC — the hedge fund run by the billionaire investor Steven A. Cohen — to face civil or criminal insider trading charges.
The civil case against Mr. Dennis comes eight months after the indictment of SAC itself. After that move, a rare show of criminal force against a large company, the investigation into SAC and Mr. Cohen began to lose momentum.
Mr. Dennis settled the civil charges with the Securities and Exchange Commission, agreeing to be banned from the securities industry and to pay $200,000. Mr. Dennis, who worked for less than two years at an arm of SAC known as CR Intrinsic before he left in 2010, was not charged criminally. In past court filings, prosecutors named him as an uncharged co-conspirator.
Some of his former SAC colleagues received worse fates. As SAC became synonymous with a broader investigation that consumed some of Wall Street’s biggest-name hedge funds, eight current or former SAC employees pleaded guilty or were convicted of criminal insider trading.
“Like several others before him at SAC Capital and its affiliates, Dennis violated the insider trading laws when he exploited confidential information about public companies,” Sanjay Wadhwa, the S.E.C. official who oversaw the agency’s investigation into SAC, said in a statement. “His actions have cost him the privilege of working in the hedge fund industry ever again.”
A lawyer for Mr. Dennis did not respond to a request for comment and a spokesman for Mr. Cohen declined to comment.
For years, Mr. Cohen was viewed as the target of the investigation. Last year, the S.E.C. charged him with failing to supervise employees accused of insider trading. But as the cases piled up, Mr. Cohen was never charged with illegal trading. He agreed to let SAC plead guilty last year. The plea deal, which requires SAC to pay $1.2 billion to the government and shut its doors to outside investors, has not yet received court approval. Judge Laura Taylor Swain of Federal District Court in Manhattan is expected to rule at a hearing on April 10.
After the charges against his firm, Mr. Cohen began a rebranding effort that led him to retire the SAC name. The firm said this week that it would rename its flagship portfolio Point72 Asset Management, a reference to the address of the office in Stamford, Conn., at 72 Cummings Point Road.
For Mr. Dennis, the S.E.C. case stemmed from confidential tips he received about two technology companies, Dell and Foundry Networks. Mr. Dennis, who received the tips from friends at rival hedge funds, ultimately “prompted illegal trades” in the shares of those companies, the S.E.C. said.
The trades, which enabled SAC to make more than $3 million in profit and avoid losses, have long been at the center of the government’s case. The Dell trades underpin the indictment of SAC and the charges against Michael S. Steinberg, the most senior SAC Capital employee convicted.
The tips came from Jesse Tortora, then an analyst with Diamondback Capital, who has become a reoccurring figure in the insider trading investigation. Mr. Tortora, who is cooperating with the government, gleaned the inside information from another friend.
Moments after one of the tidbits became public, Mr. Tortora sent an instant message to Mr. Dennis saying “your welcome.” In reply, Mr. Dennis remarked: “you da man!!! I owe you.”