“Federal investigators have turned up the heat on Wall Street, raiding three hedge funds in what one of the targets called a wide-ranging probe of insider trading,” Daniel Wagner and Larry Neumeister report for The Associated Press.
“The FBI on Monday searched the New York offices of Level Global Investors LP, and the Stamford, Conn., headquarters of Diamondback Capital Management LLC, a law enforcement official said,” Wagner and Neumeister report. “Another FBI official said the agency also searched a third site, at 30 Federal St. in Boston. Hedge fund Loch Capital Management LLC has its headquarters at that address.”
“The raids rattled Wall Street and bank shares slumped Monday as news of FBI action spread. Goldman Sachs Group Inc. sank 3.4 percent, while Bank of America Corp. fell 3.1 percent. Several white-collar defense lawyers in New York said they were bombarded by calls from traders seeking representation,” Wagner and Neumeister report. “The FBI and other law enforcement agencies are investigating insider trading by hedge funds, mutual funds and investment bankers, the Wall Street Journal reported this weekend. The companies allegedly earned tens of millions in illegal profits using secret information about mergers, according to the Journal.”
Full article here.