U.S. federal prosecutors issued subpoenas last week to four senior executives of SAC Capital Advisors.

SAC Capital advisors logo

The four senior executives of the hedge fund received subpoenas to testify before a grand jury as part of the government’s efforts to intensify investigations into insider trading at the firm.

The U.S. Attorney’s office for the Southern District of New York issued subpoenas to President Thomas Conheeney, Chief Operating Officer Solomon Kumin, Chief Compliance Officer Steven Kessler and SAC’s head of trading Phillipp Villhauer.

Steve Cohen Of SAC Capital Was Asked To Testify

SAC Capital Advisors’ founder Steven Cohen was also asked last week to testify before the grand jury as part of the government’s investigation. He is considered one of the $2 trillion hedge fund industry’s best known and most successful traders. Steven Cohen has been generating an average annual return of 25 percent over the life of his 20-year-old firm.

Earlier reports suggest Steven Cohen will not face any criminal charges, though his fund will end up paying a substantial fine.

The fresh round of subpoenas sought, among other things, additional documents and trading records.

The new subpoenas have angered SAC officials and now the hedge fund has decided to take a more combative stance. Last week in a brief letter to its investors, SAC informed that it had been co-operating with the investigation and tried to be as transparent as possible. However going forward, the hedge fund declared it would need to keep details confidential.

The testimony could relate to the potential charges that the hedge fund faces in connection with the trades it made in July 2008 in the shares of the drug makers Elan Corporation, plc (ADR) (NYSE:ELN) and Wyeth Limited (NSE:WYETH). Federal prosecutors in Manhattan have alleged that Mathew Martoma, a former portfolio manager at SAC unit CR Intrinsic Investors, received inside information about the results of an Alzheimer’s drug trial, allowing the hedge fund to record more than $275 million in profits and losses avoided.

Insider-trading charges have to be made within five years of the conduct in question. Due to the five-year deadline imposed to file securities fraud charges, the prosecutors have time till mid-July to bring a case against the hedge fund related to those trades.

In another incident, last week the Irish drug maker Elan Corporation, plc (ADR) (NYSE:ELN) shareholders filed a law suit seeking nearly $1 billion against the hedge firm SAC Capital for alleged insider trading on Elan Corp.