Wednesday, 23 July 2014
Last updated 6 hours 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."
Jul 8 2014 | 10:48am ET
The surge in derivatives regulation is among the most complex challenges facing the financial services industry today. Northern Trust’s Joshua Satten recently spoke with FINalternatives to share insights into the challenges presented by new regulation and explore how the industry is responding. Read more…