Level Global Settles Short-Selling Allegations

Jul 1 2011 | 12:39pm ET

Level Global Investors, one of the now-defunct hedge funds caught up in the Justice Department's crackdown on expert networks, has settled separate Securities and Exchange Commission allegations.

The $3.5 billion firm, which said in February it would shut its doors, agreed to pay $3.2 million to resolve allegations that it "shorted into the deal" twice with financial stocks. According to the SEC, Level Global earned $2.68 million covering their shorts of  Goldman Sachs and Regions Financial Corp. in public offerings. The SEC's Rule 105 forbids firms from participating in such offerings within five days of shorting a stock.

The hedge fund did not admit or deny any wrongdoing.

Level Global likewise said it did nothing wrong in the insider-trading probe. But that wasn't enough to save the firm, which was inundated by redemption requests after the Federal Bureau of Investigation raided its offices in November.

Ironically, a Goldman Sachs private equity fund, Petershill, owned a minority stake in Level Global.


In Depth

bfinance: Fees Falling Across Asset Classes, Yet Overall Investor Costs Still Climbing

May 16 2017 | 9:53pm ET

Despite unprecedented attention on fees, new research from investment consultancy...

Lifestyle

CFA Institute To Add Computer Science To Exam Curriculum

May 24 2017 | 9:25pm ET

Starting in 2019, financial industry executives sitting for the coveted Chartered...

Guest Contributor

Risk-Based Compliance: Why Oversight Of Outsourcing Is Critical

May 10 2017 | 7:02pm ET

Compliance is notoriously one of the trickiest middle office functions for funds...

 

From the current issue of