aiCIO Magazine – Last November 22, the FBI raided the headquarters of three major hedge funds: Level Global Investors, Diamondback Capital, and Loch Capital Management. It was the first real action by the Feds after a days-old whisper campaign from regulators and reporters (and even one would-be snitch) about a massive insider trading investigation, part of the Justice Department’s much-self-heralded campaign against securities fraud, Operation Broken Trust.
Since the raids, eight consultants and employees from Primary Global Research, a so-called investing “expert network,” have been charged, with half of them pleading guilty so far. A handful of traders and analysts also have been charged, and more indictments are likely on the way. Since being raided, Diamondback has had nearly a quarter of its funds withdrawn by investors, Level Global has announced it is shutting its doors, and another raided fund, Barai Capital, will close as well.