WASHINGTON — The Federal Bureau of Investigation has raided three hedge funds in what one of the targets is calling a wide-ranging probe of illegal insider trading in the financial industry.
Bureau employees on Monday searched the New York offices of Level Global Investors and the Stamford, Conn., headquarters of Diamondback Capital Management, a law enforcement official said. The official spoke on condition of anonymity because he was not authorized to discuss an ongoing case.
Another FBI official said the agency also searched a third site, the offices of hedge fund Loch Capital Management in Boston.
The FBI said in a statement that it had executed search warrants in the three states “in an ongoing investigation.”
Agency spokesmen said they could not comment further because the court documents are under seal.
The FBI and other law enforcement agencies are investigating insider trading by hedge funds, mutual funds and investment bankers, The Wall Street Journal reported over the weekend. The companies allegedly earned tens of millions in illegal profits using secret information about mergers, according to the newspaper.
Diamondback and Level Global both are run by former managers of SAC Capital Advisors of Stamford, Conn. Diamondback manages about $4.71 billion, according to public filings. Level Global manages $3.09 billion, filings show.
