Arrest Of Hedge Fund's Co-Founders Not So Great For Business


Lodestone Natural Resources is packing it in.

The hedge fund is being liquidated following the February arrests of two of its founders as part of an investigation into alleged insider trading, two people with knowledge of the matter said. The $100 million pool, which invests in commodity stocks, is shutting down after U.K. regulators detained Chief Investment Officer Tim Whyte and founding partner Carl Linderum for questioning on Feb. 27, said the people, who asked not to be identified because the London-based firm is private. Neither has been charged with any crime. “It’s extremely difficult for investors to stay in because of the large operational and headline risk,” said Jerome Lussan, chief executive officer of Laven Partners Ltd., a hedge-fund consulting firm in London. “That’s problematic for a firm with just one hedge fund, because once the assets go they are left with zero. You can’t survive on zero.”