New York (HedgeCo.net) – The FBI raided the offices of three hedge funds, Connecticut-based Diamondback Capital Management, Level Global Investors and Boston-based Loch Capital Management. The FBI said the raids took place under executed court-ordered search warrants, according to NPR News.
The Wall Street Journal, the first to report on the coordinated raids in New York, Connecticut and Massachusetts, said that the Level Global and DiamondBack hedge funds are both run by former managers of Steve Cohen’s giant SAC Capital Advisors hedge fund.
One banker commenting on the raid told Here Is The City: “This is the worst time possible time for an insider trading scandal to hit Wall Street, investment bankers and hedge fund professionals are going to be hitting the limelight again, and all the unpleasant stuff about greed and unethical behaviour will resurface. And, as usual, all those who work on Wall Street will get tarred with the same brush, when in truth it may be just a few rotten apples that have stepped over the line.”
The Washington Post reports that the Securities and Exchange Commission is also conducting a parallel civil probe.
The hedge funds have not been accused of any charges. Here Is The City reports that over $15 billion was wiped off the collective value of Bank of America, Citi, Goldman Sachs, JPMorgan and Morgan Stanley on Monday, due to speculation alone.
Alex Akesson
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