The investors of SAC Capital Advisors redeemed $1.68 billion from the hedge fund managed by Steven Cohen amid an on-going insider trading investigation against the firm, according to the report from Bloomberg, citing an unnamed source familiar with the issue.

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According to Bloomberg’s source, Sac Capital Advisors informed some of its advisers and employees last month, that it is expecting its clients to redeem as least $1 billion. The hedge fund has more than $15 billion assets under management at the beginning of the 2013. The hedge fund’s clients represent approximately 40 percent of its assets under management. The rest of the assets were from Cohen and his employees.

Citigroup Inc (NYSE:C) and Societe Generale SA (PINK:SCGLY) (EPA:GLE) are among the investors withdrawing their investments from the hedge fund. Citigroup has approximately $187 million in investments with SAC Capital.

SAC Capital made an agreement with The Blackstone Group L.P. (NYSE:BX) this week giving its clients a period of three months to decide whether they want to pull out or maintain their assets with the hedge fund.

Last November, the Securities and Exchange Commission (SEC) filed an insider-trading  complaint against its former portfolio manager Mathew Martoma for allegedly arranging trades involving Wyeth Limited (BOM:500095) (NSE:WYETH) and Elan Corporation, plc (NYSE:ELN). The commission cited that the hedge fund profited $22 million and avoided $56 million in losses. Martoma is facing one count of conspiracy and two counts of securities fraud.

In a statement, The Blackstone Group L.P. (NYSE:BX) said it would maintain its investments with SAC Capital for another quarter under a new and favorable liquidity agreement. Blackstone is the largest outside investor in Cohen’s hedge fund with approximately $550 million investment.

The deadline for SAC Capital investors to decide whether they want to withdraw their investment was yesterday for them to be able to redeem all their money by the end of the year. Investors would be able to redeem 25 percent of their investments from the hedge fund every quarter, under the existing rules.

SAC implemented a new rule that provides investors another three months, until the mid-May to decide. According to the hedge fund, investors who eventually decide to pull out their assets will be able to redeem one third of their money every quarter until the end of the year.

 “While we submitted redemptions for certain accounts as appropriate, BAAM (Blackstone Alternative Asset Management) successfully preserved flexibility for our clients by extending our decision time line,” said Peter Rose, spokesperson for The Blackstone Group L.P. (NYSE:BX).

Rose added, “We will use this period of time to evaluate all additional information which becomes available,” referring to the ongoing insider-trading investigation.

On the other hand, Jonathan Gasthalter, spokesperson for SAC Capital previously stated that the firm continues to cooperate with the government probe, and Cohen is confident that he did not commit any wrongdoing.