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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.
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.
...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...
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.
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...