Federal prosecutors and the F.B.I. today announced a criminal indictment against SAC Capital Advisors, the embattled hedge fund managed by billionaire Steven Cohen, based on an alleged broad conspiracy to commit securities fraud through insider trading. The indictment against the hedge fund itself — as opposed to its employees — could have disastrous consequences for the fund, including a potential exodus by its investors.

The indictment of SAC Capital is by far the largest crack yet in the company’s bow. The fund has already seen two of its employees charged with insider trading, and an SAC Capital affiliate, CR Intrinsic, recently agreed to pay over $600 million to settle SEC charges that it traded on nonpublic information about clinical pharmaceutical trials — the largest settlement in SEC history. Then, just last Friday, the SEC announced charges against Steven Cohen for failing to adequately supervise his employees and ignoring signs of suspicious trading activity.

Now, today’s 41-page indictment against SAC charges the company itself with four counts of securities fraud and one count of wire fraud and alleges a broad insider trading conspiracy spanning over a decade. The indictment also accuses SAC of “an institutional indifference” to insider trading that “resulted in insider trading that was substantial, pervasive and on a scale without known precedent in the h edge fund industry.”

It is no secret that the federal government has been trying for years to build an insider trading case against Steven Cohen. But the decision to indict SAC Capital — based on a theory that the criminal acts of its employees are imputed to the company itself — is an even bolder move. Bringing criminal charges against a company as large as SAC (the fund has 1,000 employees and had roughly $15 billion under management at the beginning of the year) is likely to have ripple effects on employees and the economy.Perhaps the most well-known example of this was when the Justice Department indicted the accounting firm Arthur Andersen in the wake of the Enron scandal in 2002, causing the collapse of the firm and the loss of 28,000 jobs.

Several of SAC Capital’s investors have already been spooked by the firm’s insider trading saga and have withdrawn billions in funds on deposit. Today’s indictment is likely to further increase the bleeding. In addition, the indictment could trigger default provisions in SAC’s agreements with its trading partners like Goldman Sachs and other large banks. If that happens, SAC could be left isolated in the market.