Level Global To Pay Legal Bills, Denies Redemption Rumors

Dec 20 2010 | 10:59am ET

Level Global Investors, one of the three hedge funds raided by the Federal Bureau of Investigation last month, has assured investors that the insider-trading probe will not hit them in the wallet.

The New York-based firm told investors on Thursday that it would cover all legal expenses related to the investigation, which has included a subpoena in addition to the unscheduled visit from the FBI. Level Global has previously said that the government has told it that it is not a target of the investigation—which it reiterated in the Thursday letter.

“As you can appreciate, we simply cannot respond to every rumor circulating in the media,” the firm said. “We can, however, reiterate what we have already said—that we are not a target of the government’s investigation and that we are cooperating fully.”

Level Global said it expects its professional liability insurance to cover its legal costs and that it would pay its deductible itself. “In the event the investment manager incurs other related expenses, it will absorb them in full.”

The $4 billion firm did respond to one rumor: That it is drowning in redemptions.

“Contrary to speculation in the media, redemptions have been immaterial, amounting to less than 10% of our capital base,” it said.

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