The Federal Bureau of Investigation has raided three hedge funds in what one of the targets is calling a wide-ranging probe of insider trading in the financial industry.
Bureau employees 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. 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, at 30 Federal St. in Boston. Hedge fund Loch Capital Management LLC has its headquarters at that address.
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.
Diamondback and Level Global both are run by former managers of SAC Capital Advisors LP, of Stamford, Conn. Diamondback manages about $4.71 billion, according to public filings. Level Global manages $3.09 billion, filings show.
Loch Capital is run by brothers Timothy and Todd McSweeney. The brothers have been linked in news reports to hedge-fund manager Steven Fortuna. Fortuna pleaded guilty last year to charges stemming from an earlier insider trading investigation by the Securities and Exchange Commission.
The raids come a month after U.S. Attorney Preet Bharara in Manhattan told the New York City Bar Association that white-collar crime was on the rise, carried out by Wall Street heavyweights who consider inside information "a performance enhancing drug that provides the illegal 'edge' to outpace their rivals and make even more money."
Bharara said his office and the FBI had both recently added more resources to exposing insider trading and considered it a top criminal priority.
"Disturbingly, many of the people who are going to such lengths to obtain inside information for a trading advantage are already among the most advantaged, privileged, and wealthy insiders in modern finance," he said last month.
That last comment from Bharara is quite telling - "Disturbingly, many of the people who are going to such lengths to obtain inside information for a trading advantage are already among the most advantaged, privileged, and wealthy insiders in modern finance."
That seems to be the problem all across the board.
They've already got more money, material goods and power than God, but they want more, more, more.
So they're coming for teachers' salaries and pensions and health care plans.
Because they need more, more, more.
Alcoholics Anonymous, a 12 step program developed to help alcoholics deal with the craving of more, more, more alcohol, was famously started after the binge of the 1920's went bust in the 1930's.
You know what we need now - a 12 step program for financial excess for all these people who need more, more, more despite having it all already.
Seriously, the craving that these financial gluttons suffer from comes from the same place the craving alcoholics suffer over alcohol.
And just like drunks don't get sober until they hit bottom, it looks like most of these hedge fund types won't give up the greed until they get caught on a wiretap or carted out in a perp walk.
I ought to add that the same might be said for our modern American society where the only thing that seemed to be privileged and valued these days is financial trading and bankster activity.
Actually doing a trade or a, uh, real job isn't much valued anymore.
So let's add American society to the list of WHO NEEDS FINANCIAL GREED REHAB?
Maybe if this insider trading scandal is as big as has been advertised, we'll hear some more calls for this kind of change.
But I doubt it.