FBI Raids 3 Hedge Funds In Trading Probe
STEVE INSKEEP, host:
NPR's business news starts with a major insider trading probe.
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INSKEEP: FBI agents raided the offices of three hedge funds on the East Coast yesterday. It's believed these raids are part of a broad investigation into insider trading on Wall Street, as NPR's Jim Zarroli reports.
JIM ZARROLI: Published reports said over the weekend that federal officials are in the middle of an extensive investigation into insider trading. Authorities believe that private consulting firms helped pass on information illegally to their clients, who included some large hedge funds and mutual funds. Yesterday, FBI agents reportedly raided Diamondback Capital Management of Connecticut and Loch Capital Management of Boston. A third hedge fund, Level Global Investors of New York, confirmed that its offices were searched and said it had cooperated fully with the investigation. Earlier this fall, a principal at Broadband Research said he had been approached by the FBI and asked to wear a wire during conversations with his clients, who include some prominent hedge funds. He said he refused to do so. Federal officials are intensifying their efforts to go after insider trading.
U.S. attorney Preet Bharara of New York said recently that insider trading is rampant and on the rise and he said a lot of it is carried out by some of the wealthiest and most privileged people in modern finance.
Jim Zarroli, NPR News, New York.
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