Indicted Hedge Fund SAC Capital 'Magnet for Market Cheaters'

Employees of various rank, including portfolio managers and research analysts, "engaged in a pattern of obtaining inside information from dozens of publicly-traded companies across multiple industry sectors," accordng to the indictment. It details how the firm allgedly sought to hire employees who had an "edge" based in part on networks of contacts with employees in particular companies.

"The mere indictment of SAC would threaten its continued existence," said attorney Stan Twardy at law firm Day Pitney LLP.

The indictment of SAC is the first significant federal criminal prosecution in the financial sector since the government charged accounting company Arthur Andersen in March 2002. The auditor was indicted for obstruction of justice related to energy and commodities firm Enron. Though the U.S. Supreme Court ultimately reversed the company's conviction, the damage to Arthur Andersen's brand was so severe that the company broke up into other businesses.

Read More: 10 Things We Didn't Learn From the Enron Scandal

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