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FBI raids Conn. offices of two hedge funds

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posted on Nov, 22 2010 @ 12:14 PM

FBI raids Conn. offices of two hedge funds

The FBI raided two hedge funds on Monday in a massive insider trading case, according to news reports.
The Wall Street Journal reported that Federal Bureau of Investigation agents raided offices of Diamondback Capital Management and Level Global Investors LP, in a probe that the newspaper says could eclipse past insider-trading investigations.
(visit the link for the full news article)

Related News Links:

posted on Nov, 22 2010 @ 12:14 PM
Just caught a glimpse of this news on the tube and the commentators were saying that this could be the trigger for another 08 type market collapse...

Is there anyone here that can expand on that possibility or were they just sensationalizing the impact of this news?

Are we in for another round of bailouts should their fears be realized?
(visit the link for the full news article)

posted on Nov, 22 2010 @ 12:22 PM
Here's a related article on the effect this news already has made on the market today:

US Stocks Sink; Financials Drop After FBI Raids Hedge Funds

NEW YORK (MarketWatch) -- U.S. stocks sank Monday as financials dropped after new details of a widespread insider-trading case emerged and worries over the stability of the euro zone following Ireland's agreement to a bailout weighed on the market.

The Dow Jones Industrial Average dropped 135 points, or 1.2%, to 11068, in early afternoon trading, falling into negative territory for the month. The Dow is now down 0.5% for November.

The measure's financial components led Monday's decline, with Bank of America off 3.4%, while J.P. Morgan Chase fell 2.9%. All of its 30 components were in the red.

posted on Nov, 22 2010 @ 01:15 PM
reply to post by JacKatMtn

Looks like we'll be slipping into another Maddoff or Boeski turmoil for the Wall Streeters. This trigger has had a big impact on the TBTF (too big to fail) banks and holdings companies also, since daily losses are showing for BoA, Citibank, JPMorgan, Goldman, etc. I find it funny that the guilty ones are stammering for shelter while the rest of us watch them.
I can see an investors' ripple from this as daytraders and everyday investors will now be asking their advisors about insiders and overall integrity of companies handling our hard earned cash.

posted on Nov, 22 2010 @ 01:55 PM
some more details on the nature of the raids found in this article:

...Two lawyers speaking to Reuters, who declined to be identified because they represent potential clients, said agents from the FBI had approached hedge fund traders over the past two weeks and a number of traders had contacted lawyers.

While the scope of the investigation is unclear it is said to focus on the use of so-called expert network firms, businesses that command big fees from hedge funds to match them up with experts in particular industries. There has been concern for years that some experts may be passing on confidential information about public companies to traders.

A year ago, shortly after the Galleon case broke, the Philadelphia office of the U.S. Securities and Exchange Commission sent out two dozen subpoenas to hedge funds and other traders, seeking information about their trading in a number of health-care related buyouts. The SEC’s Philadelphia office is ground central for the agency’s new task force that is cracking down on insider trading...

posted on Nov, 22 2010 @ 02:01 PM
reply to post by JacKatMtn

Awesome! Thanks for the news.

Even though I've now lost respect for the FBI these past nine years, perhaps there'll be a few less Range Rovers tearing down my street.

I hope there is some integrity left within the agency that will allow these proceedings to fully complete with more than the proverbial slap on the wrist. It seems as if there is, but, time will tell.


posted on Nov, 22 2010 @ 06:04 PM
Interesting piece here looking at those who may be the targets of this investigation...

It's Crazy How Inbred The Hedge Funds In This Huge Insider Trading Scandal Are

Everyone involved in the insider trading scandal that's blowing up the hedge fund world right now seems to have ties to each other - and to Steve Cohen's SAC Capital.
The government seems to have an axe to grind with hedge funds in general, and with SAC Capital, which is run by Steve Cohen and manages around $12 billion, in particular.
Clearly, the feds have been planning a huge bust of a number of hedge funds for (at least) months now.

Much much more at the linked source....

Will this turn out like most of these deals, a couple of scapegoats to parade in front of the citizens, then business as usual?


Will this be an actual crackdown on the misdeeds of those involved?

My guess is it will be the former..

posted on Nov, 22 2010 @ 06:10 PM
i wonder which of the big boys needed
a few scapgoats?

posted on Nov, 23 2010 @ 11:51 AM
While the markets have been impacted by the North/South Korea event.. a couple more articles have surfaced on the topic of the hedge fund deal...

Goldman Sachs (NYSE: GS) Facing New Investigation

...The Wall Street Journal reported this past weekend that authorities are examining whether insider-trading rings reaped illegal profits totaling tens of millions of dollars. The report indicated that one
angle of inquiry is whether Goldman Sachs bankers leaked information about transactions to the benefit of certain investors...

Another interesting piece tries to decipher info gathered around the web..

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