Wednesday, 22 October 2014
Last updated 11 hours ago
Dec 8 2010 | 3:37pm ET
It may not be a target of the Justice Department's massive insider-trading investigation, but that doesn't appear to matter for Loch Capital Management.
The Boston-based hedge fund, one of three raided by the Federal Bureau of Investigation two weeks ago, will lay off most of its staff at the end of the year, Hedge Fund Alert reports. A spokesman for Loch told HFA that "no decision has been made to close" the firm, but declined to comment on the report of layoffs.
Loch currently employs 14 people. According to HFA, most of them will be out of a job after Dec. 31.
Even before the raid last month, it had been a difficult year for Loch. The firm, headed by Timothy and Todd McSweeney, suffered significant redemption requests following the arrest and guilty plea of the brothers' longtime friend, Steven Fortuna, in the Galleon Group insider-trading case. Fortuna was the head of Boston hedge fund S2 Capital Management and is a key witness in the Galleon case.
The firm's assets under management have slipped to $200 million from a peak of $2 billion.
News of the layoffs comes just days after Loch became the third of the three hedge funds raided on Nov. 22 to say that it had been assured by the government that it was not a target of the probe. The firm also said it had stopped using expert networks, which are among the focuses of the insider-trading investigation.
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