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

Whisky Business: The Ultimate Liquid Alternative Investment

Sep 15 2014 | 7:02am ET

David Robertson knows his single-malt whisky—he was the Master Distiller at the...

Lifestyle

Hedgies Rock Out For Children's Charity

Sep 15 2014 | 8:40am ET

It's that time of year again—when hedgies trade in their spreadsheets for guitars...

Guest Contributor

The Cult of Loss Aversion: A Call to Rethink Risk in Global Macro Investing

Sep 4 2014 | 5:45am ET

In the wake of a traumatic loss, whether it is financial or personal, it is just...

 

Editor's Note

    Get A Sneak Peak Of The Alpha Pages

    Aug 25 2014 | 11:21am ET

    As many of you know, FINalternatives was recently acquired by the owners of Futures magazine, a firm called The Alpha Pages LLC. Today marks the soft-launch of a new sister site for both publications. As its name suggests, The Alpha Pages will cover all types of alternative investments, going far beyond the more well-known ones such as hedge funds and private equity. Read more…

 

Futures Magazine

July/August 2014 Cover

In search of the ‘new normal’ at the Fed

The Federal Reserve keeps baby-stepping toward a “normalization” of monetary policy. But just what is normal?

The Alpha Pages

TAP July/August 2014 Cover

The Alpha Pages Interview: Senator Rand Paul

Senator Paul sat down in the debut series of the Alpha Pages Interview to discuss the broken tax code, regulation surrounding Bitcoin, and his plans for the 2016 Presidential election.