Raided Loch Capital Shuttered Last Year

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.


In Depth

The Benefits Of Private Debt Investing

May 7 2015 | 10:43am ET

Jeffrey Haas is chief operating officer of Old Hill Partners Inc., an SEC-registered...

Lifestyle

Yale Receives $150 Million Gift from Blackstone’s Schwarzman

May 12 2015 | 12:10am ET

Yale University announced it has received a $150 million gift from Blackstone Group...

Guest Contributor

How To Generate 6% Yield In A Volatile World

May 22 2015 | 6:41am ET

Private credit comes in many different flavors, all with the common themes of over...

 

Editor's Note