Insider Trading Small Hedge Funds

Small Hedge Funds Hit Hard by Insider Trading Probe

The hedge fund industry certainly took a hit from the insider trading probe but the investigation seems to have hurt small hedge funds the most. The investigation which centered around expert networks and technology firms has taken a toll on several small funds that have had to close shop since the insider trading probe.

Steven T. Glass, the founder of STG, which once had more than $200 million under management, notified investors last week he was shutting down his fund, said one investor familiar with the situation, who declined to be identified.

STG is the second New York hedge fund to shut down in the wake of a series of arrests of people associated with Primary Global Research, a California-based expert network firm that matches hedge funds with industry consultants.

The Wall Street Journal reported on Monday that Barai Capital Management, a small $80 million hedge fund raided by federal agents in November, is also closing.

Four people familiar with the investigation said both STG and Barai regularly employed Primary Global consultants to gather information on tech stocks. Source

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