As the legal net tightened around SAC Capital, the $14bn hedge fund charged yesterday with insider trading, its founder Steven Cohen remained defiant.

After SAC agreed to pay a record $616m settlement of civil insider trading accusations with regulators earlier this year, Mr Cohen went out a few days later and spent $155m on Pablo Picasso’s painting “Le Rêve”.

Civil and criminal authorities have spent a decade probing rumours, tips, and allegations that SAC was generating big returns by trading on inside information. Now that Mr Cohen’s hedge fund has been charged with four counts of securities fraud and one count of wire fraud and accused by the government of “insider trading that was substantial, pervasive and on a scale without known precedent in the hedge fund industry”, the time for bravado may be over.