Insider trading allegations don’t always cause
a hedge fund to shut down. Witness
Diamondback Capital Management, one of four hedge funds
raided by the Federal Bureau of Investigation in November 2010.
While the other three have closed, Diamondback is still open
— at least for the moment.
This month, almost a year after another of the four funds,
Level Global Investors, shuttered, one of its founders, Anthony
Chiasson, was arrested by the FBI in New York City. Todd
Newman, formerly a technology portfolio manager at Diamondback,
was also arrested, in Boston, and Jesse Tortora, a former
analyst at the firm, pleaded guilty to charges of securities
Level Global and Diamondback were the largest of the four
hedge funds raided by the FBI. The others, Barai Capital
Management and Loch Capital Management, closed shortly after
the raid. (The FBI hasn’t charged the firms with
any wrongdoing. Samir Barai, founder of...