Saturday, 27 December 2014
Last updated 3 days ago
Jan 20 2012 | 1:18pm ET
Its name once again dragged through the mud with the arrest of a former portfolio manager, Diamondback Capital Partners is again trying to reassure investors that their money is safe.
The Stamford, Conn.-based hedge fund has beaten the odds so far, surviving in spite of a raid of its office, the arrest of a former trader and some $2 billion in redemptions. But Tuesday saw the arrest of another former trader, Todd Newman, who was charged along with seven others with insider-trading.
Newman and three others, including a SAC Capital Advisors trader and a founder of hedge fund Level Global Investors, were arrested thanks to the cooperation of the three others charged in the case, all of whom have pleaded guilty. One of the cooperating witnesses is Jesse Tortora, a former Diamondback analyst and the alleged go-between in the ring, buying confidential information about Dell Inc. and trading it with his fellow alleged insider-traders.
But Diamondback said it "has been proactively assisting the U.S. Attorney's Office and the SEC since we became aware of the inquiry," Hedge Funds Review reports.
"The fruits of that cooperation are reflected in the charges filed and unsealed today against two former employees," Diamondback's Richard Schimel and Larry Sapanski wrote to clients. They called their cooperation "an important step in putting this matter behind us."
Newman's illegal trades earned Diamondback $3.9 million, according to the Securities and Exchange Commission. The firm, which has never itself been accused of any wrongdoing, settled with the SEC in August. It said that Newman was put on leave immediately after the Federal Bureau of Investigation's raid of Diamondback's offices last November.
Four hedge funds were raided that month. The other three, including Level Global, have since closed.
Dec 1 2014 | 10:21am ET
As 2014 winds down, Northern Trust Hedge Fund Services executives took some time to share their outlook on trends facing the industry in 2015. Read more…
Jeff Sprecher was simply looking for a platform to trade energies when launching ICE 14 years ago but it has grown to reach the pinnacle of both the listed futures and equities world.