The Securities and Exchange Commission said it pared back its case against Steven A Cohen and disclosed settlement talks with him, a reversal that reflects a major shift in the legal landscape since the US government declared victory in its long pursuit of the hedge-fund billionaire’s firm.

After a 2½-year pause, the SEC said it would amend its civil case against Cohen, in what is likely the last attempt to hold him liable in connection with allegations of insider trading at the firm he founded, SAC Capital Advisors.