Matthew Goldstein and Svea Herbst-Bayliss report that Boston-based Loch Capital Management has been “hit hard” by redemptions since the friend, Steven Fortuna, of founders (and bros) Timothy and Todd McSweeney pleaded guilty to insider trading, and agreed to cooperate with the government re: perhaps ratting out cohorts. It doesn’t appear that Fortuna and the McSweeneys have ever worked together but the trio go way back (born, raised, continue to live in Massachusetts, all played basketball together, and get their drink on every now and then) so obviously The Tuna could potentially have dirt. Though some investors told the reporters the reason behind the redemptions is the relationship between the the admitted criminal and their managers, Reuters notes that the requests “may be nothing more than an overreaction based on speculation” or simply “an indication of just how nervous hedge fund investors remain a year after the Bernard Madoff scandal left a lot of investors looking foolish.” Neither brother (nor any of their employees) has been charged with any wrongdoing, but they are telling anyone looking to poke around to piss off, ASAP:
Matthew Goldstein
Loch Capital Investors Pull Money Due To Founders’ Friendship With Known Insider Trader
By Bess LevinFairfax Financial, a Canadian Insurer, still has it in their head that some of the most feared and respected hedge funds got non-public information about the company and spread it around the street encouraging their buddies to short the heck out of the stock.
Matt Goldstein, at Reuters, is now reporting that the SEC has taken notice of an on-going civil suit Fairfax filed, in 2006, against noted short-seller Jim Chanos and Stevie Cohen and has started their own investigation. One that Reuters thinks will involve these titans’ funds into being forced to turn over any and all trading records to the folks that missed the Madoff Ponzi scheme.
That this is what happens when you f a stranger and/or employee in the ass? In the figurative sense of not compensating him as much as he thought was deserved (we can’t speak to whatever off the clock relationship Aleynikov had with Lloyd Blankfein)? Matthew Goldstein, who broke the story, says yes.
