FBI Raids Three Hedge Funds In Insider-Trading Probe

Nov 22 2010 | 3:50pm ET

Agents from the Federal Bureau of Investigation today raided the offices of three hedge funds as part of a larger insider-trading investigation.

Diamondback Capital Management and Level Global Investors were the targets of the searches, conducted by the FBI's New York and New Haven, Conn., offices. Diamondback is based in Stamford, and Level Global in Greenwich.

The Feds also raided the office of Boston-based Loch Capital Management, according to published reports.

Richard Kolko, a spokesman for the FBI, said that the search of Diamondback's office was still ongoing and that "all matters regarding this matter remain under seal." The FBI also confirmed that a search warrant had been executed at Level Global.

Andy Merrill, a spokesman for Level Global, told Bloomberg News that the hedge fund was "cooperating fully." A spokesman for the hedge fund also told The Wall Street Journal that it believes the raid is "part of what we believe to be a broader investigation of the financial services industry discussed media reports over the weekend."

That "broader investigation" is a three-year-long probe into insider trading that could ensnare some of the world's top hedge funds. Dozens of hedge funds have been subpoenaed in the matter, and the first charges could be filed within weeks.

Both Diamondback and Level Global were founded by alumni of SAC Capital Advisors, believed by some to be a target of the investigation. Former SAC analyst Jonathan Hollander is known to have provided at least two statements to prosecutors over the past year-and-a-half. Those statements came to light as part of a separate insider-trading case that produced the conviction of former Jefferies Group hedge fund manager Joseph Contorinis last month.

Diamondback has more than $5 billion in assets under management and Level Global about $4 billion.


In Depth

Q&A: Open Season For Closed-End Funds

Aug 29 2014 | 10:00am ET

When Maury Fertig and Bob Huffman, former Salomon Brothers coworkers, launched...

Lifestyle

Och Funds Women In Finance Initiative At U-M

Aug 28 2014 | 3:01pm ET

Och-Ziff Capital founder Daniel Och and his wife have made a "generous donation"...

Guest Contributor

Looking Ahead: What’s In Store For Managed Futures?

Aug 22 2014 | 12:52pm ET

The last five years were phenomenal for investors in equity indices. Will the next...

 

Editor's Note

    Get A Sneak Peak Of The Alpha Pages

    Aug 25 2014 | 11:21am ET

    As many of you know, FINalternatives was recently acquired by the owners of Futures magazine, a firm called The Alpha Pages LLC. Today marks the soft-launch of a new sister site for both publications. As its name suggests, The Alpha Pages will cover all types of alternative investments, going far beyond the more well-known ones such as hedge funds and private equity. Read more…

 

Futures Magazine

July/August 2014 Cover

The time was right

Commodities/Futures magazine launched at the precipice of a revolution in the futures industry—really a revolution in the idea of risk management—that would move it from a small niche industry to ...

The Alpha Pages

TAP July/August 2014 Cover

The Alpha Pages Interview: Senator Rand Paul

Senator Paul sat down in the debut series of the Alpha Pages Interview to discuss the broken tax code, regulation surrounding Bitcoin, and his plans for the 2016 Presidential election.