SAC Capital Advisors LP founder Steven Cohen will remain under federal investigation even if prosecutors miss a late July deadline for charging him in the largest insider-trading case in history, a person familiar with the probe said.

Cohen, 57, probably won’t face charges over July 2008 trades triggered by his then-portfolio manager Mathew Martoma, the Wall Street Journal reported last week. Martoma is accused of recommending that SAC sell shares of two drug companies, based on an illegal inside tip he received.

The five-year statute of limitations deadline for prosecutors to bring charges against Cohen for a series trades sparked by Martoma’s tip expires July 29 at the latest. Prosecutors have insufficient evidence against Cohen to charge him in that matter, the newspaper said without identifying its sources.

Cohen, whose Stamford, Connecticut-based firm manages $15 billion, isn’t out of the woods legally should prosecutors fail to persuade Martoma, 39, to testify against his former boss, or come up with other evidence by the end of the month, according to the person, who asked not to be identified because of the confidential nature of the investigation.

The Martoma transactions netted Cohen’s firm $276 million, according to Martoma’s indictment.

Other Trades

If the five-year-statute of limitations isn’t satisfied in the Martoma case, U.S. investigators will continue to probe other SAC trades including its sale of Dell Inc. stock in August 2008, the person said. To get around statutory limits, prosecutors could eventually charge Cohen with conspiracy if they either find evidence he took even a small step in furthering a continuing insider scheme within five years of the trading or by linking unrelated insider trading acts, said Douglas Burns, a former federal prosecutor in New York who isn’t involved in the SAC case.

“The overt act could be an e-mail, a phone call or something which is part of the conspiracy and furthers it,” Burns said.

“Conspiracy is the best friend of the government,” said Burns, who defended a case in which U.S. prosecutors charged his client with participating in an ongoing conspiracy involving two alleged crimes eight years apart.

If statutory deadlines are missed, “there’s no such thing as popping champagne when creative conspiracies can be created,” Burns said. “Since there are other SAC trades that go later than July 2008, Cohen still has to worry about potential charges. Very often federal prosecutors connect the new trades with the old, call it one continuing conspiracy and can very effectively bring the old conduct into play without running afoul of the statute of limitations.”