NEW YORK ( TheStreet) -- The Securities and Exchange Commission has charged hedge fund billionaire Steven A. Cohen of SAC Capital with failing to supervise two senior traders -- Mathew Martoma and Michael Steinberg -- amid allegations of insider trading under his watch. The SEC alleges Cohen received highly suspicious insider information from his traders, however, instead of investigating them, Cohen praised Steinberg and rewarded Martoma with a $9 million bonus for his work. The regulatory agency has said both traders were involved in illegal insider trading conspiracies that helped the hedge fund to hundreds of millions of dollars in profits and avoided losses. "Hedge fund managers are responsible for exercising appropriate supervision over their employees to ensure that their firms comply with the securities laws," Andrew J. Ceresney, Co-Director of the SEC's Division of Enforcement, said in a statement. "After learning about red flags indicating potential insider trading by his employees, Steven Cohen allegedly failed to follow up to prevent violations of the law. The Enforcement Division is seeking to bar Cohen from overseeing investor funds, in addition to the more than $615 million his firm has already agreed to pay for the alleged insider trading." The SEC's administrative proceeding, while potentially a career ender for Cohen's multi-decade run atop Wall Street, isn't a criminal charge or an accusation of fraud. "The S.E.C.'s administrative proceeding has no merit," Jonathan Gasthalter, a spokesperson for SAC Capital, said in an e-mailed statement. "Steve Cohen acted appropriately at all times and will fight this charge vigorously. The S.E.C. ignores SAC's exceptional supervisory structure, its extensive compliance policies and procedures, and Steve Cohen's strong support for SAC's compliance program." In November, the SEC charged Martoma and his tipper with insider trading, and the agency charged Steinberg with insider trading in a complaint filed earlier this year. The SEC's charge against Cohen will determine what penalties or industry bans he could face, however, it appears that for now the regulator wasn't ready to consider Cohen as part of either Martoma or Steinberg's alleged criminal acts. Earlier in 2013, CR Intrinsic, an affiliate of Cohen's firm S.A.C. Capital, agreed to pay more than $600 million in the largest-ever insider trading settlement. Sigma Capital, another SAC affiliate, agreed to pay nearly $14 million to settle insider trading charges.