The deal with the Securities and Exchange Commission settles allegations that Cohen failed to effectively monitor a former portfolio manager, Mathew Martoma, who was convicted of insider trading. Cohen has neither admitted guilt nor denied the charges, which stem from when the firm was known as SAC Capital Advisors.
Under the agreement, his firms will face SEC examinations and reviews from an independent consultant. The SEC could also extend the ban if it takes new actions against Cohen or related firms.
"Resolving the case gives us certainty and opens a path to raising outside capital in the future if we believe that is in best interest of the Firm." Steve Cohen in an internal e-mail.
Martoma worked at CR Intrinsic Investors, a subsidiary of SAC. The SEC alleges that Cohen ignored possible signs that Martoma was insider trading.
The agency claims Cohen's funds made about $275 million through the trades. CR Intrinsic paid more than $600 million to settle SEC insider trading charges in 2013.
Martoma is serving a nine-year prison sentence in Florida.
— CNBC's Kate Kelly and Jim Forkin contributed to this report.