(Bloomberg News) U.S. Securities and Exchange Commission investigators are considering fraud and control-person claims against Steven Cohen, the billionaire founder of SAC Capital Advisors LP, after signaling they intended to pursue related sanctions against his firm, a person familiar with the matter said.

Jonathan Gasthalter, a spokesman for SAC, declined to comment.

SAC Capital Advisors LP, the $14 billion hedge fund run by Cohen, received a Wells Notice related to alleged insider trading by a portfolio manager who was arrested last week, according to three people with knowledge of the matter.

The notice from the U.S. Securities and Exchange Commission, an indication that the regulator may sue the recipient, cited fraud and control-person liability over its management of CR Intrinsic Investors LLC, a unit of SAC, according one the people. Cohen wasn’t named in the Wells notice, said the person, who asked not to be named because the information is private.

SAC received the notice last week, Tom Conheeney, the firm’s president, told investors on a conference call today during which the firm discussed the Nov. 20 arrest of a former SAC portfolio manager, Mathew Martoma, for alleged insider trading while at SAC. Cohen, who opened the call, said he acted appropriately when he traded shares of the drugmakers four years ago on recommendations from Martoma, according to two of the people. Trades in the shares by Martoma are at the center of what prosecutors call the biggest insider-trading scheme.

Cohen hasn’t been accused of any wrongdoing. Conheeney said the firm will pay any penalties, according to the person.

Martoma’s Charges

Jonathan Gasthalter, a spokesman for SAC, declined to comment on the call.

The SEC sends a Wells notice to a company or an individual after its staff has determined that sufficient wrongdoing has occurred to warrant civil charges being filed. The notice gives the recipient a chance to try to dissuade the SEC from taking action.

Prosecutors say SAC, one of the best-performing hedge funds, reaped $276 million in profits and averted losses by trading stocks of Elan Corp. and Wyeth LLC in 2008 based on inside information Martoma received, and that Cohen traded those shares in his own portfolio and discussed the stocks with Martoma.

Control-person liability is a provision that Congress created in 1988 that introduced liability for managers who fail to maintain a system to discourage and detect insider trading by subordinates, according to James Cox, a professor at Duke University School of Law in Durham, North Carolina. That provision doesn’t require the SEC to prove Cohen knew about the trades, just that the compliance system broke down, Cox said.

Last week’s charges mark the sixth time a current or former SAC employee was linked to insider trading while working at the Stamford, Connecticut-based company.

CR Intrinsic, the unit where Martoma worked at the time, was named last as a defendant in a civil complaint by the SEC, along with Martoma and the doctor who allegedly provided the inside information.