New York (HedgeCo.net) – One of three hedge funds raided by the FBI last week, Connecticut based Diamondback Capital Management LLC, has said that the FBI is investigating one of their employees and a portfolio manager, who has peen put on leave, according to Bloomberg. The hedge fund got a federal grand jury subpoena and announced that they are cooperating with the FBI in the probe, according to a letter to investors.

“One of the principal areas on which the government appears to be focused is the use of industry research consultants.” Diamondback co-founders Lawrence Sapanski and Rich Schimel said in a letter published by Bloomberg.

The two other hedge funds raided were Level Global Investors LP and Loch Capital Management.  Hedge funds Janus Capital Group Inc. and Wellington Management Co. also received requests for information in the FBI investigation.

Also affected by the probe is hedge fund, Level Global, who told investors that they were also questioned but not targeted.  SAC Capital Advisors LP also received a subpoena, according to sources.

So far the only arrest made by the FBI is that of Don Ching Trang Chu, an employee of a California research firm. Chu is charged with helping a hedge fund get results from a Taiwan telecom company before the revenue was made public.

Alex Akesson
Editor for HedgeCo.net
alex@hedgeco.net
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