US federal prosecutors announced Monday that SAC Capital Advisors has agreed to plead guilty to insider trading violations and pay a record $1.2 billion penalty.

The giant hedge fund is the first large Wall Street firm in a generation to acknowledge its criminal conduct.

The government has also forced the company to terminate its business of managing money for outside investors, the New York Times reported.

Insider trading at SAC was “substantial, pervasive and on a scale without precedent in the history of hedge funds,” said Preet Bharara, the US attorney in Manhattan. His office has criminally charged eight former SAC employees; six have pleaded guilty.

According to the NY Times, despite lengthy investigations, federal authorities have not been able to build a case against SAC’s billionaire owner, Steven A. Cohen.

Cohen has said he has done nothing wrong and that he thinks the government intended to destroy him and his hedge fund.

SAC has been a top stock-trading client of major US banks including Goldman Sachs and JPMorgan Chase. It has paid the banks billions of dollars in commissions, according to the newspaper. The banks have also made profits extending loans to the hedge fund.

Cohen has also privately complained that he has to pay more than $1 billion out of his own pocket for the crimes of rogue employees, the NY Times said.

Cohen started SAC in 1992 managing $25 million. He reportedly earned $900 million a year in 2006 and 2007.

He lives across Long Island Sound in Greenwich, Conn., in a 36,000-square-foot home with an indoor pool and a two-hole golf course.