Lodestone’s Linderum Said to Be Arrested in FSA Probe

Carl Linderum, a founding partner of hedge fund Lodestone Natural Resources, was one of the three men arrested last month in London on suspicion of insider trading, according to a person with knowledge of the matter.

Linderum was arrested on Feb. 27, said the person, who asked not to be identified because the information hadn’t been publicly disclosed. Carl Esprey, 33, who has worked as a portfolio manager at GLG Partners Inc., was also detained in the same insider-trading probe.

Linderum is currently listed as “inactive” on the Financial Services Authority register. He started his career as a trainee at Morgan Stanley in 2003, according to the register, and subsequently worked at Brevan Howard Asset Management LLP.

“The FSA has launched a criminal insider-trading investigation,” Elizabeth Robertson, a partner at K&L Gates LLP in London who represents Linderum, said in an interview. “We will be contesting the FSA’s allegations.”

Ben Belldegrun, another of Lodestone’s founding partners, declined to immediately comment.

The investigation is part of a push by the FSA to crack down on insider trading by employees at London’s biggest financial companies after having previously targeting lower-profile individuals. The U.K. regulator arrested five people including a Schroders Plc equity trader in another insider-trading investigation last month and last week won a two-year prison term against former Legal & General Group Plc equities trader Paul Milsom for passing inside information on block trades to an independent stockbroker.

The regulator and London’s Metropolitan Police also executed six search warrants last month on homes and offices in the British capital and the surrounding areas.

(Updates with Linderum lawyer comment in fourth paragraph.)
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