July 23 (Reuters) - Hedge fund firm SAC Capital Advisors gave its employees a 46-page rebuttal to U.S. government allegations that Chief Executive Steven Cohen failed to take effective measures to prevent insider trading, The Wall Street Journal reported.
The newspaper said the firm’s lawyers had prepared the memo in response to the U.S. Securities and Exchange Commission (SEC) civil enforcement action on Friday against Cohen. ()
In its order, the SEC detailed how it believes Cohen turned a blind eye to what it called illegal trades by two of his portfolio managers.
The SAC Capital memo, distributed to employees on Monday, called the allegations against Cohen “baseless”, the newspaper reported.
The SEC is seeking to bar Cohen from managing other people’s money, though still unclear if it will seek a lifetime ban or for a shorter duration.
In March, SAC Capital agreed to pay a record $616 million penalty to settle a separate SEC lawsuit arising from an investigation of trading on illegal information.