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Major investment firms subpoenaed in insider trading probe

A number of high-profile investment firms — including two that manage mutual funds owned by millions of Americans — have received subpoenas in a federal probe of alleged insider trading on Wall Street.

Janus Capital Group Inc., a Denver-based mutual fund family, reported in a regulatory filing Tuesday that it had “received an inquiry regarding the recently disclosed insider trading investigation on Wall Street calling for general information.”

Boston-based Wellington Management, which invests money for a number of pension funds and mutual funds, also received a government request for information, Bloomberg News reported.

One of the biggest names in the hedge fund world, SAC Capital Advisors, wrote in a letter to clients Tuesday that it had received a government request for information, according to a person who saw the letter.

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Another big hedge fund operator, Chicago-based Citadel Asset Management, and at least two smaller hedge fund firms also were reported to have been subpoenaed.

Shares of Janus slumped 2.8% on the news. SAC Capital and Wellington are privately held.

News of the subpoenas came a day after FBI agents raided the offices of three hedge fund firms as part of the insider trading probe. Although a raid requires a search warrant approved by a judge, a subpoena can be issued without judicial approval.

Wellington has $598 billion in assets under management. Janus manages $161 billion. SAC Capital and Citadel manage many fewer billions than Wellington or Janus, but charge much higher fees relative to the size of the portfolios they handle.

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The government’s interest in SAC Capital caused a buzz on Wall Street because of the firm’s successful track record and an air of mystery surrounding its secretive founder, billionaire art collector Steven A. Cohen, who has been called the “hedge fund king” by the Wall Street Journal.

Two of the firms raided Monday were started by alumni of SAC Capital.

nathaniel.popper@latimes.com


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