Monday, November 22, 2010

Three Hedge Funds Raided by FBI Over Alleged Insider Trading

Diamondback Capital Management LLC and Level Global Investors LP, both based in Connecticut, and Loch Capital Management LLC, based in Boston, were raided by the Federal Bureau of Investigation on allegations of insider trading.

Richard Kolko, an FBI spokesman, said this: "The FBI is executing court-authorized search warrants in an ongoing investigation."

Loch has assets valued at $750 million as of January 1, 2010; Level Global has about $4 billion in assets; and Diamondback has approximately $5 billion in assets under management.

Some people close to the situation say this could be just the beginning, and there could be more firms named and investigated in the future.

They asserted this will probably be the largest investigation related to insider-trading, which will include investment bankers, consultants, mutual fund investors and hedge fund traders.

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