Hedge fund Two Sigma is likely to have to pay as much as $100 million to resolve a U.S. Securities and Exchange Commission probe into a trading scandal at the firm, The Wall Street Journal reported Thursday.

The U.S. hedge fund is likely to be held accountable for how it oversaw an ex-employee at the center of the misconduct, which led to hundreds of millions of dollars in unexplained losses and profits, the report added citing people familiar with the matter.

The researcher allegedly modified trading models without authorization. Two Sigma and the regulator are in talks and the outcome could be a lower payment for the firm, the people added.

The SEC and Two Sigma did not immediately respond to Reuters' requests for comment.

Two Sigma co-founders John Overdeck and David Siegel decided to step down as Chief Executive Officers in August.

The hedge fund, with $60 billion in assets under management, disclosed in a regulatory filing last year that a rift between its top managers poses governance challenges and a material risk for the firm.

Both Overdeck and Siegel, who founded Two Sigma in 2001, are to continue as co-chairmen.