Kessler, who joined SAC in 2005, is leaving to spend more time with his family, said the source. John Casey will become the firm's interim compliance chief.

A spokesman for the firm declined to comment.

The departure comes as SAC, once one of the world's biggest and most successful hedge funds, turns itself into a family office that will manage founder Steven A. Cohen's $9 billion personal fortune.

The firm was forced to stop managing money for outside investors last November as part of an agreement to plead guilty to insider-trading charges and pay $1.8 billion in penalties.

Kessler, who came to the Stamford, Connecticut-based firm from Goldman Sachs, was one of a handful of top SAC officials who received subpoenas as the government built its case against the firm.

(Reporting by Svea Herbst-Bayliss; Editing by Prudence Crowther)