Feds Seek To Transfer Diamondback Forfeiture

Aug 8 2012 | 12:02pm ET

Federal prosecutors yesterday filed a lawsuit over Diamondback Capital Management—for $6 million it has already turned over.

The civil forfeiture complaint is just a formality. Diamondback transferred $6 million to the U.S. Marshals Service as part of a non-prosecution agreement struck in January. That deal, and a parallel accord with the Securities and Exchange Commission, settled Diamondback's part in a damaging insider-trading scandal.

The Stamford, Conn.-based hedge fund, one of four raided by the Federal Bureau of Investigation in 2010, and the only one still in business, was never charged with wrongdoing. The $6 million represents profits earned by former portfolio manager Todd Newman, who was arrested in January for insider-trading.

Diamondback was not even named in the suit filed yesterday, which seeks to move the forfeited money from the Marshals to the U.S. Treasury. The case's name is U.S. v. $6 million in currency.

"The action is a simple formality to move funds previously paid to U.S. Marshal to the U.S. Treasury," Diamondback spokesman Steve Bruce told Bloomberg News. "There is nothing new here."


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