Friday, 30 January 2015
Last updated 53 min ago
Dec 17 2010 | 9:39am ET
Level Global Advisors, one of the hedge funds raided as part of the insider-trading investigation last month, has said it is not the subject of the probe. That may be because one of its executives has been providing information to the Federal Bureau of Investigation.
"Regulatory sources tell the Fox Business Network there is an FBI mole working at the firm as well," the network's Charles Gasparino reported.
That a Level Global executive may be cooperating with the government comes as no surprise to John Kinnucan, who runs one of the expert-network research firms at the center of the investigation.
Kinnucan, who earned a sort of folk-hero status when it emerged that he had refused to cooperate with the FBI and wear a wire in conversations with SAC Capital Advisors, told FBN that he suspected something was afoot when Level Global, one of his biggest clients, abruptly terminated their relationship.
Brian Murray, the hedge fund's chief financial officer, "basically told me they didn't need me anymore, and this was just a couple of days after the company's founder was saying how well I was doing and how much they loved my work."
Level Global would not deny that one of its executives was cooperating in the investigation. The firm has said that the government has told it it is not a target of the probe.
It may not be a target, but it is suffering. FBN reports that "they are fielding massive redemption requests," although the hedge fund says that clients have sought to pull less than 10% of its $4 billion in assets. Gasparino reports, however, that Cornell University's endowment is among those investors redeeming.
All three of the hedge funds raided last month have said they are not targets of the probe. But one of them, Loch Capital Management, appears to be closing its doors. Earlier this month, it was reported that the firm was laying off most of its employees at the end of the year.
Jan 23 2015 | 1:00pm ET
In our new section, FINtech Focus, we will profile one of these firms each week. While fintech is a broad category, we will be focusing on firms that specifically cater to the alternative investment industry. Read more…