Three Hedge Funds Raided As Insider Trading Probe Widens

Discussion in 'Wall St. News' started by S2007S, Nov 22, 2010.

  1. S2007S



    Three Hedge Funds Raided As Insider Trading Probe Widens
    Published: Monday, 22 Nov 2010 | 2:07 PM ET
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    By:, with Reuters

    FBI agents raided the offices of three hedge funds Monday with more expected to follow as part of a broad insider trading investigation, the Wall Street Journal reported.

    The Journal broke earlier today that authorities had raided the Connecticut offices of Diamondback Capital Management and Level Global Investors. Both funds are run by former managers of Steve Cohen's SAC Capital Advisors.

    The third, Loch Capital Management, based in Boston, is headed by Timothy and Todd McSweeney. The brothers are acquaintances of Steven Fortuna, a hedge-fund manager who pleaded guilty in the Galleon case and agreed to cooperate in that investigation, the Journal said.

    David Ganek, a former SAC trader, manages about $4 billion in assets through Level Global Investors. Diamondback Capital Management oversees more than $5 billion, while Loch Capital Management maintains $750 million in assets, the Journal said, citing SEC filings.

    A spokesman for Level Global confirmed that federal agents had searched the company's offices and that the hedge fund is cooperating with authorities. A lawyer for Loch Capital declined to immediately comment on Monday, the Journal reported.

    The raid follows a Journal report this weekend that federal authorities were preparing a slew of insider trading chargers against the $1.7 trillion hedge fund industry. The probe into allegations of widespread misconduct will likely involve consultancies, investment banks and trading firms, reported the Journal.

    The charges, which could be filed as soon as this year, would be on top of those made in an existing case against Raj Rajaratnam and his hedge fund, the Galleon Group.

    Twenty-three former hedge fund managers, lawyers and others have faced criminal or civil charges in the case, which prosecutors called the largest insider trading case in hedge fund history. Fourteen have pleaded guilty to criminal charges, eight have pleaded not guilty and one is at large.

    Although it has not been implicated in any of the charges, Goldman Sachs shares suffered today amid worries that the bank may be embroiled in the investigation.
  2. shocking , im shocked, just shocked, whodathunkit
  3. they should raid first, announce the investigation to the public after

    all files have been shredded