Two people are in custody in the U.S. probe of insider trading at hedge funds and another two, including Level Global Investors LP co-founder Anthony Chiasson, are to surrender to authorities later today, according to a person familiar with the matter.
Todd Newman of Diamondback Capital Management LLC was arrested in the Boston area today by the Federal Bureau of Investigation, according to the person, who asked not to be identified because the arrests haven’t been made public. Another person was picked up in New York and a fourth is going to turn himself in today, according to the person.
Securities fraud charges stemming from the probe will be announced today by the office of Manhattan U.S. Attorney Preet Bharara, the person said.
Bharara’s office has charged at least 56 people with insider-trading and more than 50 have pleaded guilty or been convicted after trial since 2009. They included Galleon Group LLC co-founder Raj Rajaratnam, who was convicted in May and is serving 11 years in prison.
Not at Home
When FBI agents this morning sought to arrest Chiasson at his Manhattan home, they discovered that he had already left, said the person. FBI agents encountered Wall Street Journal reporters at the building, the person said. Adrienne Senatore, a spokeswoman for the FBI’s New York office, declined to comment on the arrests or Chiasson’s absence from his home.
Ellen Davis, a spokeswoman for Bharara, declined to comment on the attempted arrest.
On Nov. 22, 2010, FBI agents from New York and Boston executed search warrants at the offices of Level Global and Diamondback, hedge funds founded by former employees of SAC Capital Advisors LP.
Level Global told clients last February that it was shutting, eight years after David Ganek and Chiasson founded the hedge fund, because of the U.S. probe.
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