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:
Loch Capital Management and the firm's Boston-based lawyer, Leonard Pierce, did not respond to a number of telephone calls and email messages requesting information about the redemptions and the brothers' friendship with Fortuna.
A security guard at Loch's offices in the city's financial district said he had been instructed to turn away any reporter.
He even had photographs of the two authors of this story at his kiosk with instructions not to let them enter under any circumstances.
Does this mean they have something to hide? Maybe, maybe not. Who knows? It's all relative. Goldstein may simply be on a no-fly zone at hedge funds up and down the Eastern Seaboard, insider traders or not, given that he most recently brought Ping Jiang's blow job rules to light, and some of you have something similar going down on-site you'd rather outsiders not know about just yet.