SAC Capital has been formally indicted for insider trading and called a “magnet for market cheating” by federal prosecutors who said the firm had engaged in illegal securities trading from 1999 to 2010. While SAC Capital faced charges, its leader and principal beneficiary, Steve Cohen, was not charged.

The 41-page indictment and prosecutors depicted a corporate structure and culture in which Cohen sat at the center of a web of portfolio managers and research analysts, systematically collecting and trading on information he should have suspected was illegally gathered from employees of publicly traded firms such as Intel, Dell and Yahoo.

But seemingly lacking sufficient direct evidence against Cohen, one of the nation’s wealthiest individuals, the government, at least for now, opted to proceed in court with charges against his companies, but not the founder and chief guiding force himself.

SAC Capital has pleaded not guilty to the charges and is gearing up for a long court battle. The government claims to have court-authorized phone wiretaps, emails, and instant message records on SAC Capital employees and others engaging in the wrongdoing along with cooperating statements from former SAC Capital employees – a mountain of evidence SAC Capital will have to overcome in court.

Steven Cohen’s hedge fund, SAC Capital Advisors, pleaded not guilty to insider trading charges in federal court on Friday. The firm’s general counsel, Peter Nussbaum, flanked by five high-powered defense lawyers, entered the plea before U.S. District Judge Laura Taylor Swain in New York…

Ted Wells, a lawyer representing SAC Capital, said he was “most concerned” with obtaining statements that former employees of the $14 billion hedge fund have provided the government.

SAC Capital has long been in the government’s cross-hairs and – unlike previously – it seems slipping away clean may not be an option this time.

Cohen, however, appears to be safe for now. Even if Cohen takes damage in the SEC civil suit he will only be banned from managing other people’s money not his own which, thanks to his management of SAC Capital, ranges in the billions.

Who says cheaters never prosper?