Friday, 21 October 2016
Last updated 28 min ago
Mar 8 2011 | 1:45pm ET
Faced with crippling redemptions in the wake of a Federal Bureau of Investigation raid, Loch Capital Management has closed its doors.
The Boston-based hedge fund, which was never accused of any wrongdoing and was not a target of the insider-trading investigation, liquidated its funds last year and has returned all capital to investors, Bloomberg News reports. The firm has also laid off all of its 14 employees; reports last year indicated that the firm would lay off most of its workers at the end of the year.
Loch Capital, headed by brothers Timothy and Todd McSweeney, had already suffered major redemptions following the arrest and guilty plea of longtime friend, Steven Fortuna, in the Galleon Group insider-trading case. As of late last year, Loch's assets had fallen from a peak of $2 billion to just $200 million.
Loch's demise means that three of the four hedge funds raided by the FBI last year are no more. Level Global Investors threw in the towel last month, and Barai Capital Management last year. The latter's founder and an analyst have been criminally charged in the case.
Only Diamondback Capital Management remains standing, having withstood more than $1.3 billion in redemption requests.