Supposedly, yes.

And apparently it can’t be blamed on the Feds, who included Loch Capital in its hat trick of raids on Day One of Insider Trading Fest(ivus) 2010.

The Boston-based hedge fund, one of three raided by the Federal Bureau of Investigation two weeks ago, will lay off most of its staff at the end of the year, Hedge Fund Alert reports. A spokesman for Loch told HFA that “no decision has been made to close” the firm, but declined to comment on the report of layoffs. Loch currently employs 14 people. According to HFA, most of them will be out of a job after Dec. 31. Even before the raid last month, it had been a difficult year for Loch. The firm, headed by Timothy and Todd McSweeney, suffered significant redemption requests following the arrest and guilty plea of the brothers’ longtime friend, Steven Fortuna, in the Galleon Group insider-trading case. Fortuna was the head of Boston hedge fund S2 Capital Management and is a key witness in the Galleon case. The firm’s assets under management have slipped to $200 million from a peak of $2 billion.

Loch Capital To Layoff Most Of Its Employees [FINalternatives]