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The FBI said it had searched the offices of both firms. Federal law enforcement agents also executed a search warrant at the offices of Boston-based Loch Capital Management, according to a person familiar with the probe who declined to be identified because the matter isn't public.
Steve Bruce, a spokesman for Stamford, Connecticut-based Diamondback, declined to comment. Andy Merrill, a spokesman for Level Global, based in Greenwich, confirmed the FBI had searched the hedge fund's offices.
"We are cooperating fully with the authorities," Merrill said in an e-mailed statement.
Diamondback owned U.S.-listed stocks in 706 companies at the end of the third quarter, with a market value of $4.13 billion, most of it in energy companies and financial services, according to data compiled by Bloomberg. Level Global owned stocks in 77 companies valued at $3.08 billion, with 34% of that in consumer discretionary stocks and 31% in information technology companies.
Its biggest U.S. stock holding by market value is a 5.8% stake in Virgin Media Inc., the U.K.'s second-largest pay-television company, according to regulatory filings for the third quarter.
Minority Stake
Level Global, founded in 2003 by SAC veteran David Ganek, told clients in April that it had sold a minority stake to a leveraged-buyout firm run by Goldman Sachs Group Inc.
Goldman Sachs's Petershill Fund Offshore LP, which bought the minority stake in Level Global earlier this year, also has holdings in Capula Investment Management LP, Winton Capital Management Ltd. and Trafalgar Asset Managers Ltd., all based in London, as well as New York-based Claren Road Asset Management LLC and Greenwich, Connecticut-based Shumway Capital Partners LLC.
Diamondback was started in 2005 by Rich Schimel, Lawrence Sapanski and Chad Loweth, all former SAC traders. Schimel is the brother-in-law of SAC's founder, Steven A. Cohen. Loweth left Diamondback this year.
Lucas van Praag, a spokesman for New York-based Goldman Sachs, didn't immediately respond to a call and e-mail seeking comment. Jonathan Gasthalter, a spokesman for Stamford-based SAC, declined to comment.
