Which Hedge Fund Is Keeping An FBI Raid Secret?


Could a small Manhattan hedge fund be keeping the fact that it was raided by federal agents a secret from investors?

Back on November 22, the FBI raided three hedge funds—Diamonback Capital management, level Global and Loch Capital management.

But about a week before that the Feds searched the offices of another hedge fund—whose identity remains a mystery.

Matthew Goldstein of Reuters has spoken to sources familiar with the investigation—sources that are obviously law enforcement types, probably in the New York federal prosecutor’s office—who confirmed that a fourth fund was raided but refused to name the fund:

Speculation about a raid on a fourth hedge fund began shortly in late December after federal authorities arrested and charged Winifred Jiau, a former technology company consultant, with passing inside information to two hedge fund traders.

Jiau, who is in jail in California after being denied bail, had worked as a consultant for Primary Global Research, a Mountain View, California-based expert network company. She is the seventh person associated with Primary Global to be charged in the investigation, which has focused on the role of consultants in providing inside information about technology companies to hedge fund traders and analysts.

In the criminal complaint filed against Jiau, FBI agent B.J. Kang noted a federal judge had signed a search warrant "on or about November 12, 2010" to seize some computers and tape recording devices at "hedge fund A." The only description of hedge fund A in the complaint is that it is a fund located in Manhattan.

It seems likely that the fourth fund has not told its investors about the raid. If it had, word would likely have spread and the mystery over which fund it is, would be resolved.

So the mystery remains. For now.


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