Administrative proceedings will determine what relief is in the public interest against Cohen, including financial penalties, a supervisory and financial services industry bar, and other relief, the authority said on Friday.  

The action marked the first time he was personally accused of wrongdoing in the investigation, which has run for months. Cohen faces a criminal insider-trading probe. The SEC has not filed civil-fraud charges against him.

The SEC alleges that Cohen obtained "highly suspicious" information that should have caused "any reasonable hedge fund manager" to investigate the basis for trades made by portfolio managers Mathew Martoma and Michael Steinberg, who reported to Cohen. 

Martoma and Steinberg have pleaded not guilty to insider dealing and are due to go on trial. Martoma is an SAC ex-trader, while Steinberg is a current one. Two former SAC traders, Noah Freeman and Donald Longueuil, have pleaded guilty.

Media reports quoted an SAC spokesperson as saying the SEC action had no merit.

"Steve Cohen acted appropriately at all times and will fight this charge vigorously," the spokesperson said, continuing that the agency was ignoring the hedge-fund firm's "extensive compliance policies and procedures."

SAC was set up in 1992; according to the Wall Street Journal, it has consistently boasted some of the best returns in the $2.4 trillion hedge fund sector.

The SEC's investigation continues.