Hedge Fund Consultant Charged with Data Theft

WEST PALM BEACH, FL (HEDGECO.NET) – S3 Partners, a hedge fund advisory firm, attracted some negative press last week, when a former consultant to Morgan Stanley was arrested and charged Friday with stealing an electronic list of hedge funds that are clients in its prime brokerage business and the rates it charges them.

Ira Chilowitz, a one-time consultant for the investment bank, has been charged with conspiracy and unauthorized computer access, according to a criminal complaint unsealed Friday. The federal magistrate judge set Chilowitz’s bail at $100,000.

Federal prosecutors charged Ira Chilowitz with stealing the confidential pricing information from Morgan Stanley’s hedge fund prime brokerage group and passing it on to a “co-conspirator’’ at a midtown company that provides advisory services to hedge funds.

S3 was founded by Robert Sloan, the former head of prime brokerage at Credit Suisse, in June 2003 and the company has $618 million in client assets under management.

In a statement, a Morgan Stanley spokesman said, “The U.S. Attorney’s Office, acting on information supplied by Morgan Stanley, took action earlier today in connection with an investigation into the misappropriation of proprietary and confidential Morgan Stanley data by an ex-consultant to the firm and another individual. We place the highest priority on maintaining the integrity of confidential information and are continuing to take every appropriate measure to safeguard that information.”

Alex Akesson
Contributing Writer
HedgeCo.Net
Email: [email protected]

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