Investors in Steve Cohen’s SAC Capital Advisors are starting to get restless.
Three big banks — Citigroup, Morgan Stanley and Société Générale — have been making moves that could eventually lead clients to pull money from the $14 billion hedge fund.
Citi’s private-banking unit has put SAC on its watch list and recommended that clients not add to their investments in the hedge fund.
The same decision was made by Morgan Stanley, according to CNBC, which first reported the moves.
Lyxor Asset Management, part of French bank Société Générale, has already asked to withdraw its clients’ funds from SAC.
The banks either declined to comment or could not be reached. An SAC spokesman declined to comment.
The moves came after a former SAC portfolio manager, Mathew Martoma, was arrested Nov. 20 on insider-trading charges. The complaint made reference to Cohen, who has not been charged with wrongdoing.
Martoma’s alleged scheme was the biggest insider trade ever, netting a whopping $276 million, according to prosecutors.
The Securities and Exchange Commission also has issued a Wells notice to SAC, indicating that it may bring civil charges against the firm for related securities-law violations.
The feds have been trying to build an insider-trading case against SAC and Cohen for several years.
The first direct hit came in February 2011, when two former SAC employees were arrested — and later pleaded guilty — for trading on inside information while working at the Stamford, Conn., hedge fund.
That led some investors to pull out, but SAC was still able to raise capital during 2011.
SAC’s flagship offshore and onshore funds had combined net inflows of a little more than $1 billion in 2011, according to Absolute Return.