FINRA expressed mounting concern about SAC Capital Advisors' trading over a nine-year period, detailing in dozens of confidential reports suspicions that the hedge-fund firm might have profited from insider information. The reports, submitted by to the SEC, don't allege wrongdoing by SAC, which is overseen by billionaire founder Steven Cohen. But FINRA investigators described SAC's history of well-timed trades as unusually prescient and particularly profitable, according to more than 320 pages of documents reviewed by The Wall Street Journal. The so-called referrals to the SEC offer a rare look at the process of how Wall Street's regulators try to spot potential suspicious trading activity, and how they act on their suspicions. In the 18 referrals made by FINRA, as well as the NASD, between 2002 and 2011 that were reviewed by the Journal, investigators said they were vexed by SAC's repeated appearance in routine screens of suspicious trading near mergers and acquisitions, earnings announcements and other market-moving news. SAC said that, as it makes thousands of transactions a day, it is not surprising that it would appear in a small number of FINRA referrals. The SEC hasn't taken public action against SAC related to the referrals. Such referrals usually lack the persuasive evidence needed by the SEC to file a successful civil-enforcement action, let alone the proof required for a criminal conviction. In the two years that ended in September 2010, the SEC received 721 referrals about potential insider trading from self-regulatory organizations, including FINRA. The SEC launched 90 insider-trading enforcement actions in the same period. Not all of those began as referrals from outside the SEC. Still, the referrals about SAC offer a regulator's highly detailed observations of the trading habits of a hedge-fund giant that spreads trading commissions and other fees across Wall Street. The details of the SAC trades and regulators' reports about them haven't been disclosed previously. The referrals describe trades by SAC and other hedge funds, in a variety of industries, from software and biotechnology to banking, natural-gas exploration and steelmaking. The SEC could still take enforcement action using data gleaned from reports it received years earlier. Instances of trading are described in the 18 NASD and Finra referrals as making SAC as much as $2.3mn in a single stock, or helping the firm avoid as much as $1.2mn in losses in cases where SAC sold shares or otherwise bet against a company ahead of negative news. Others involved much smaller amounts, including the $37,500 SAC made in potential profit from trades around an infant-formula maker's 2010 share offering, according to a Finra referral. All told, the referrals say SAC or funds affiliated with it benefited from the trading in question by making potential profits or avoiding losses totaling more than $15mn. [WS Journal, 10/25/11]