Tim Whyte, the chief investment officer of hedge fund Lodestone Natural Resources, was one of three men arrested last month in London on suspicion of insider trading, according to two people familiar with the matter.
Whyte was arrested Feb. 27 along with Carl Linderum, a founding partner of Lodestone, and Carl Esprey, a portfolio manager at GLG Partners Inc., according to the people, who asked not to be identified because the information hadn’t been publicly disclosed.
Calls and e-mails to Whyte seeking comment didn’t receive a response. Ben Belldegrun, another of Lodestone’s founding partners, declined to comment. All those arrested hold positions that required approval from Britain’s Financial Services Authority. None have been charged.
Whyte, who trades stocks tied to the commodities industry, started Lodestone last year with Linderum and Belldegrun after the three left London-based Brevan Howard Asset Management LLP, according to a filing with the U.K.’s Companies House. Prior to Brevan Howard, Whyte was a hedge-fund manager focused on natural resources at Sofaer Capital.
The FSA and the Metropolitan Police executed six search warrants last month on homes and offices in the British capital and the surrounding areas. The agency has sought to crack down on insider trading at London’s biggest financial companies after having previously targeting lower-profile individuals.
Esprey, 33, was questioned about trades he made through a private account, a person familiar with the allegations said last month. He joined Man Group Plc (EMG)’s GLG unit in January 2008 as a portfolio manager for its European Long-Short Fund, according to a July 2012 press release. Before joining GLG in London, he worked in the corporate-finance department of BHP Billiton Ltd. (BHP), the world’s biggest mining company, GLG has said.
Esprey declined to comment when reached by phone yesterday.
Man Group confirmed that one of its employees had been arrested by the FSA and said the case regards the person’s “actions as a private individual and not as an employee of Man Group or GLG.” The firm said it suspended the employee and had cooperated with the FSA.
Linderum started his career as a trainee at Morgan Stanley in 2003, according to the FSA register of people approved to work in the finance industry. A lawyer for Linderum said he plans to contest the FSA’s allegations.
Both Linderum and Esprey have been switched to “inactive” on the FSA register, while Whyte is still active.
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