Hedge fund manager Steven A. Cohen, founder and chairman of SAC Capital Advisors. (Steve Marcus/Reuters)

On Monday, several investors in SAC Capital Advisors informed the hedge fund that they would be pulling out billions of dollars, the latest toll from an ongoing insider trading investigation that has dogged the Connecticut firm and sullied its storied reputation.

Jittery investors already had asked to withdraw $1.7 billion earlier this year after the firm revealed that federal regulators were preparing to file a civil lawsuit against the fund, which has $15 billion of assets under management — about 60 percent of it belonging to the firm’s legendary founder Steven A. Cohen and SAC employees.

By the time another quarterly redemption deadline hit late Monday, investors had asked to take out billions more as the prospect of criminal charges loomed against Cohen and his hedge fund, according to people familiar with the requests. The legal wrangling has intensified because federal prosecutors have about two months to snag the hedge-fund guru or his firm in what it describes as the most lucrative insider-trading scheme it has pursued.

A five-year clock started ticking in that case in July 2008, when one of Cohen’s portfolio managers allegedly received secret tips about the results of a clinical trial involving an Alzheimer’s drug, enabling the hedge fund and others to make more than $276 million.

While the government has charged several of the hedge fund’s current and former employees with illegal trading in the past, it has never accused Cohen of wrongdoing. The Alzheimer’s drug case stands out because it is the first to tangentially connect the billionaire to an illegal transaction, suggesting that the industry’s godfather may be in the government’s crosshairs.

The outcome involves high stakes for both Cohen and the government, experts tracking the case said. Prosecutors have been working their way up the hierarchy at the hedge fund for years, they said, and this case gives them their best shot at Cohen — if they can act before the five-year statute of limitations lapses in late July. July 21.

“If July comes and goes and they don’t bring an indictment against Cohen, the U.S. attorney’s office is going to look pretty bad,” said Bradley Simon, a former federal prosecutor in New York and Washington. “If they go after the lower-level people in the company and allow [Cohen] to go uncharged, it will send a message that they’re either not up to the task or they’re afraid to go after him.”

The U.S. attorney’s office in Manhattan declined to comment, as did a spokesman for the hedge fund, SAC Capital Advisors.

But several white-collar crime attorneys say this is crunch time for the government.

Prosecutors typically work complex cases almost to the deadline, indicting people a day or two before time is up, said Frank C. Razzano, a former federal prosecutor in New Jersey. Prosecutors want to use all the time they’ve got to prepare a case because a defendant can ask for a trial within 70 days after he or she is indicted, he said.

“They want to be sure that they have run down every possible lead before they return the indictment,” Razzano said. “This is the homestretch for the government.”

To extend the deadline, prosecutors can negotiate a “tolling agreement,” in which firms or people under investigation agree to waive the five-year limit.

It’s unclear whether Cohen has been approached about a tolling agreement. He and his firm have consistently maintained that they have acted appropriately.

If Cohen were to refuse a tolling agreement, he could force the government to bring charges and risk having even more investors flee his hedge fund. The latest to bow out include some of the biggest investors, such as Blackstone Group, according to several media reports. Ironwood Capital Management in San Francisco asked to withdraw $100 million, a person familiar with the request said.

If Cohen were to waive the deadline, he would leave open the possibility of resolving the issue without an indictment but expose himself to scrutiny by federal authorities for longer.

His firm settled two civil cases with the Securities and Exchange Commission in March for $616 million. The hedge fund did not admit wrongdoing. One of the cases involved the Alzheimer’s drug trades and resulted in a $602 million penalty — a record sum for an insider-trading case. That settlement awaits final court approval.

A senior SEC official said at the time that the settlements did not preclude the agency from filing charges against Cohen or his firm.

Last month, SAC sent a letter to investors saying it will no longer unconditionally cooperate with federal authorities. At about the same time, Cohen and four high-level SAC employees received subpoenas to testify before a grand jury, according to media reports.

The move reveals a little about SAC’s thinking, said Adam Pritchard, a law professor at the University of Michigan Law School at Ann Arbor.

“If there can be a civil resolution and a fine, then cooperating is a reasonable strategy,” Pritchard said. “But if you’re looking at the prospect of jail time, you’re going to make the government prove their case, and you’re not going to help them make their case.”

Peter Henning, a law professor at Wayne State University Law School in Detroit, said the government may end up going after the hedge fund instead of its owner.

The portfolio manager accused of insider trading in the Alzheimer’s drug case — Mathew Martoma — has not pointed a finger at Cohen. Neither has Michael Steinberg, one of Cohen’s top lieutenants at SAC, who was indicted on insider-trading charges in March. Both men maintain their innocence.

“Nobody has turned on Cohen, so it may come down to the next best thing: his firm,” Henning said. “If you can’t get the top person, go after the company.”

Clearly, the prospect of the firm’s downfall does not play well with the outside investors who have bolted. It’s unclear exactly how much money investors have asked to withdraw. But their money would be returned throughout the year, said people familiar with the arrangement who were not authorized to speak publicly about the matter.

But at least one investor is not too worried, and he’s keeping his money put.

Ed Butowsky, managing partner at Chapwood Investments, said SAC has generated strong returns for its customers. If Cohen or SAC needed to return the money for any reason, doing so should be “little problem” because their holdings are very liquid, he said.

“My clients’ tails are wagging because the returns are good,” Butowsky said. “I do not have any plans to change my position in SAC based on the information I have as of now.”