In an unusually aggressive move, Federal Authorities and the US Attorney General have filed a raft of criminal complaints against Wall Street’s largest hedge fund, SAC, accusing it of everything from insider trading to wire fraud.

While it has been known for a while that some level of action was forthcoming from the US Attorney’s office, the scope and language used in the complaint have caught many lawyers and financial executives by surprise.

While the government has not yet filed charges against Steven A. Cohen, the billionaire founder and exclusive owner of the fund, these charges are liable to have a crippling effect on the hedge fund and Mr. Cohen’s own ability to continue in the financial services industry. Indeed the additional civil case filed by the SEC, specifically takes aim at Mr. Cohen accusing him of failing to supervise his employees and seeking to ban him from the financial services industry for the rest of his life. The civil case is seeking to recover “any and all” of the firm’s assets which could be a huge blow to Mr. Cohen, who personally has over $8 billion invested in SAC.

The government charges that SAC, which has roughly $14 billion under its management, actively engaged in seeking out and taking insider information related to publicly traded companies and turning that information into a profit.

Prosecutors allege that there was a culture of encouragement that fostered the use of illegal tips and that the company specifically hired traders while letting them know that their performance was based on the use of insider information. Further alleging that the firm engaged in money laundering, the government is preparing to argue that these actions tainted the firm’s assets as a whole and hence is seeking a forfeiture of all the assets in the case, an unusual stance to take. Under normal circumstances the SEC would have sought a forfeiture of the ill-gotten gains made through the use of, or saved by, the use of insider information.

US Attorney Preet Bharara, who is heading the investigation, said at a news conference that the company was a “magnet for market cheaters”. He added that the government is not seeking to freeze the company’s assets currently but declined to comment on the amount sought in the forfeiture.

The filing of the case brings to a close a decade long investigation. Investigators were first suspicious of insider trading at SAC starting in the 1990s. It also pits one of the governments most ambitious prosecutors, Mr. Bharara, against a man who is considered to be one of Wall Street’s most savvy investors. The government will face an army of lawyers from two of the world’s most sophisticated law firms: Willkie Farr & Gallagher and Paul, Weiss, Rifkind, Wharton & Garrison. The fund has also enlisted Mark F. Pomerantz and Theodore V. Wells Jr. of Paul Weiss. Pomerantz has been involved in a number of insider-trading cases, including the defense of Samuel Waksal, former chief executive of Imclone Systems, and Joseph Contorinis, a former portfolio manager at Jefferies Group.

Prosecutors named eight portfolio managers and analyst who worked at SAC, that they say received inside information and either traded themselves or shared the information with other traders at the hedge fund.

One prominent figure named was Richard Lee, who was charged earlier with conspiracy to commit securities fraud, and whom prosecutors say Cohen hired despite being warned by a previous employee that Lee was part of an “insider trading group”. Mr. Lee has already pleaded guilty to the charges and is cooperating with the FBI and SEC investigations.

Prosecutors pointed out that, while six former SAC employees have been convicted or pleaded guilty to insider-trading-related charges, “SAC’s compliance department contemporaneously identified only a single instance of suspected insider trading by its employees in its history.”

The criminal charges by the U.S. attorney’s office in Manhattan come in an era of unprecedented insider-trading prosecutions, and they are the most aggressive move against a major Wall Street firm since investment bank Drexel Burnham Lambert Inc. in 1988 pleaded guilty to six felony counts and paid a $650 million fine.

No major financial firm has survived a criminal indictment. But the charges won’t necessarily destroy SAC. Until now, Cohen has been largely shielded from the crippling effects of mass investor withdrawals. Interestingly enough, the criminal complaint comes 4 months after SAC agreed to a record $616 million settlement, on charges of insider trading, with the SEC without agreeing to admit to any wrongdoing.

Insider trading and unscrupulous behavior permeates all levels of the investment world, making it prudent to know whom you are doing business with and conducting a high level of due diligence.