Wednesday, 17 September 2014
Last updated 6 min ago
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."
Aug 25 2014 | 11:21am ET
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