Former U.S. SEC Chairman Arthur Levitt joined Bloomberg Television's "Surveillance" this morning to discuss yesterday's SAC guilty plea to securities and wire fraud and the record $1.8 billion penalty and said, if he was running a firm, he would not take Steven Cohen as a customer. Levitt went on to say insider trading is a "pervasive" problem and that this situation is "not unique" and predicts that "we will see more of this under the present leadership of this commission and the U.S. attorney."

DISCLAIMER: Arthur Levitt is the member of the board of Bloomberg LP, parent company of Bloomberg Television

Former SEC Chairman Levitt on the significance of the record SAC penalty:

"This is real theater. This is David vs. Goliath. Little Mary Jo White takes on great big Stevie Cohen and not just for a day or a week or a month, but for years and her tenacity, her toughness has delivered what a great SEC chairman should deliver. It's an admission of guilt at long last that she has brought to the SEC and it hasn't had that in 30 years. And highly visible Stevie Cohen who has done everything he possibly could to go in her face."

On whether Steven Cohen has been found to do anything wrong:

"The curtain hasn't fallen get on Stevie Cohen. The whole notion of failure to supervise is part of the fiber of the securities business. It is inconceivable that Cohen wasn't aware of some of the goings on and didn't built the culture of insider trading that permeated that company. This is not the last act but it is a very important intermission."

On whether companies like JP Morgan and Goldman Sachs should continue doing business with SAC:

"I think they probably have to continue to do business because I understand there are some firms that haven't left Cohen yet and cannot leave them in the wilderness. The question is, and I think that should be posed, would they take Stevie Cohen as a customer tomorrow if they weren't doing business with him? If I was running a firm, I would say "No way."

On where the win should be attributed to Preet Bharara over Mary Jo White:

"Yes of course but the image the public will have, in my judgment is less Preet and more Mary Jo. Mary Jo has become almost a rock star by virtue of her personality of her size, of the way she is handling herself."

On whether SEC needs a bigger budget to go after more Steven Cohens:

"They do need a bigger budget, but it is how they use the budget and Mary Jo has shown all her predecessors just by one act, but saying 'we are no longer going to accept or deny, we are going after them' that message resounds outside the halls of government."

On how pervasive is the issue of insider trading:

"It's very pervasive, it is not unique and I believe we will see more of this under the present leadership of this commission and the U.S. attorney."