How Pursuit of Billionaire Hit One Dead End When Jonathan Hollander left his high-flying job at SAC Capital Advisors in late 2008, he departed one of Wall Street's premier hedge funds. Weeks later, when two Federal Bureau of Investigation agents confronted him outside the Equinox gym in Greenwich Village, Mr. Hollander realized that investigators viewed his former employer as something else - a corrupt organization rife with insider trading. The agents took Mr. Hollander into a nearby cafe and questioned him about his trading in the stock of a supermarket chain. They showed him a sheet of paper with headshots of several of his former colleagues. At the center was a photograph of Steven A. Cohen, the billionaire owner of SAC, according to two lawyers briefed on the meeting who requested anonymity because they were not authorized to discuss it publicly. The agents compared Mr. Cohen to a Mafia boss who sat atop a criminal enterprise, the lawyers said. In the end, no criminal case was filed against Mr. Hollander. And neither Mr. Cohen nor SAC has been accused of any wrongdoing. Mr. Cohen has told employees and clients that he and SAC have at all times acted appropriately. An examination of Mr. Hollander's case, based on a review of court documents and interviews with people involved in the investigation, provides a lens into the government's aggressive crackdown on insider trading and fierce pursuit of Mr. Cohen over the last decade. Investigators saw Mr. Hollander as a suspect, and he also piqued their interest as someone who could open a window into SAC and Mr. Cohen. Yet the investigation of Mr. Hollander, 37, also highlights the challenges of using lower-level employees to build a case against their boss. The authorities have moved on from Mr. Hollander, who is working as an entrepreneur. Today, they are focused on another former junior SAC employee, Mathew Martoma, who is fighting a recent indictment and refuses to cooperate with the government. Mr. Martoma's case has increased the pressure on SAC and Mr. Cohen, who was involved in the trades at the center of the charges against Mr. Martoma. While Mr. Hollander provided prosecutors with no such direct link to Mr. Cohen, some authorities thought he possessed a rich vein of information about his former employer. Others dismissed him as a junior analyst who offered uncorroborated tips at best, lawyers close to the case recalled. With authorities at odds over his importance and the strength of the evidence against him, Mr. Hollander's criminal case fizzled. The Securities and Exchange Commission settled a lawsuit with Mr. Hollander related to improper trading in his personal account for less than $200,000, a manageable penalty for someone who earned a few million dollars on SAC's trading floor. And in an embarrassment for prosecutors, they charged the investment banker who they thought provided confidential information to Mr. Hollander, and then dropped the case against the investment banker entirely. "A low-level guy sometimes doesn't get the government where it needs to be because there is only so much information they can give," said Allen D. Applbaum, co-leader of global risk and investigations at FTI Consulting and a former federal prosecutor. Frequently, you can hit a dead end or a roadblock and then have to move on. Through his lawyer, Aitan D. Goelman, Mr. Hollander declined to comment for this article. A native of Annapolis, Md., Mr. Hollander pursued a career on Wall Street after graduating from Tufts University and Stanford Business School. Early in his career, in the late 1990s, Mr. Hollander worked at Credit Suisse, where he became fast friends with two other ambitious young analysts - Ramesh Chakrapani and Nicos Stephanou. The three went their separate ways but stayed in touch. Mr. Hollander eventually landed at SAC, where he spent nearly four years in its CR Intrinsic unit, a division of the fund. In November 2008, SAC, which is based in Stamford, Conn., let Mr. Hollander go during broad cuts because of the financial crisis. Around that time, investigators learned that Mr. Stephanou, who had moved to UBS, was sharing confidential information with friends about merger deals, according to court records. That December, the F.B.I. arrested Mr. Stephanou, who began cooperating. He told investigators about a dinner that he claimed to attend with Mr. Hollander and Mr. Chakrapani where the three freely discussed a planned buyout of the grocery business Albertsons. Mr. Stephanou and Mr. Chakrapani, who was then working as a banker at the Blackstone Group, both advised on the transaction. F.B.I. agents approached Mr. Hollander and Mr. Chakrapani in January 2009. It was a coordinated operation. As the agents waited for Mr. Hollander to finish his workout, law enforcement officials met Mr. Chakrapani at John F. Kennedy International Airport as he walked off a plane from London. They arrested Mr. Chakrapani and prosecutors filed a complaint charging him with tipping an unnamed hedge fund trader about the Albertsons deal. The S.E.C. filed a parallel lawsuit. Mr. Hollander was the unnamed hedge fund trader, according to lawyers close to the case. Prosecutors said that the trader - Mr. Hollander - made $3.5 million in profits for his employer by illegally trading in Albertsons stock. Mr. Hollander, seen as a potential cooperator who could help them penetrate SAC, was not charged. After his initial meeting with agents at the Greenwich Village cafe, where Mr. Hollander appeared calm and poised, he spent two days in April being interviewed by government officials at the United States attorney's office in Manhattan. Prodded for information about the hedge fund giant, Mr. Hollander offered up several examples of questionable activity at SAC that he had either witnessed or had heard about, lawyers briefed on the matter said. He told the authorities about a lucrative, uncannily timed trade in the drug maker Elan, which is now at the center of Mr. Martoma's prosecution. While investigators were already examining the transaction, Mr. Hollander reinforced their suspicions. Mr. Hollander also shared information on a more than $150 million trade at SAC involving shares of the biotechnology firm MedImmune, the lawyers said. Authorities suspected that an SAC employee placed the trade using inside information about a British company's 2007 acquisition of MedImmune. Some of the insights Mr. Hollander offered aided the government's inquiry into SAC. The broader investigation has led to three onetime SAC traders pleading guilty to trading stocks based on secret corporate information while at the fund; at least seven former employees have been tied to insider trading. Representatives for the F.B.I., the United States attorney's office in Manhattan and the S.E.C. declined to comment. After a flurry of activity, the cases against Mr. Chakrapani and Mr. Hollander sputtered. In a rare reversal, just three months after bringing criminal charges against Mr. Chakrapani, prosecutors dropped them without explanation. As investigators struggled to corroborate Mr. Stephanou's story, the S.E.C. also withdrew its lawsuit. The government said in court papers that dismissing the case against Mr. Chakrapani had nothing to do with its "assessment of Stephanou's veracity." Mr. Stephanou, who was detained for 19 months in jail, while cooperating, has since returned to his native Cyprus. After Mr. Chakrapani's arrest, Blackstone suspended him. Without a job, he moved in with his parents in California. Mr. Chakrapani recently rejoined Blackstone, according to a spokesman for the firm. "The dismissal of the unwarranted charges brought against Mr. Chakrapani cannot undo the damage to his professional reputation," said Michael Sommer, the lawyer who represented Mr. Chakrapani. And it remains one of the glaring flaws in our system that the law provides little if any legal recourse for those subjected to these types of damages. Mr. Hollander also remained in limbo as authorities weighed his importance and the quality of the evidence against him. Some wanted to use him as a witness in a broader SAC case, according to officials briefed on the investigation, but prosecutors questioned the accuracy and utility of his tips. Ultimately, he was never criminally charged and did not enter into a formal cooperation agreement with the government. The S.E.C. did not bring its lawsuit until 2011. And when it did, unlike the triumphal news releases that normally accompany its insider trading victories, the agency put on its Web site a brief statement about the settlement. The complaint did not mention SAC. The S.E.C.'s case involved claims that Mr. Hollander, along with a family member and business school classmate, illegally traded Albertsons stock in their personal accounts, earning combined profits of about $96,000. Mr. Hollander agreed to pay the government $192,000, and accepted a three-year ban from the securities industry. At the time of the settlement, Mr. Goelman, the lawyer for Mr. Hollander, said his client resolved the matter rather than engage in costly litigation. His brush with the government seemingly over, Mr. Hollander has tried to move on. Unable to trade stocks, he started his own consulting firm, the Chesapeake Advisory Group, and also co-founded EvoSpend, a financial services technology company. And last year, in an attempt to improve his Internet profile and de-emphasize articles about his insider trading case in Google search results, Mr. Hollander set up a series of Web pages highlighting his philanthropic pursuits and other accomplishments.