Hedge-fund giants SAC Capital Advisors and Citadel Asset Management, big mutual-fund company Janus Capital Group Inc. and Wellington Management Co., one of the nation's biggest institutional-investment firms, have received subpoenas from the Manhattan U.S. Attorney's office seeking trading, communications and other data as part of a broad criminal investigation, according to people familiar with the matter.
The Federal Bureau of Investigation also recently questioned an executive at Primary Global Research LLC, a California company that provides 'expert-network' services to hedge funds and mutual funds, people familiar with the matter say.
Such expert-network firms set up meetings and arrange calls between traders seeking an investing edge and current and former managers from hundreds of companies. The FBI is seeking information about a Primary Global consultant and his hedge-fund clients, these people say.
Executives of Primary Global, based in Mountain View, Calif., didn't respond to requests for comment. Representatives of Wellington, Citadel and SAC, which is run by Steve Cohen, declined to comment. Janus said in a filing that it 'intends to cooperate fully with that inquiry,' which sought 'general information.' Janus shares fell 2.8% in Tuesday trading.
Subpoenas are requests for information and don't necessarily mean the recipients are suspected of wrongdoing.
The latest disclosures show that authorities are pursuing numerous strands in their three-year investigation. One focus is whether expert-network firms leaked inside information to hedge funds and others, according to people familiar with the matter. Another is whether independent consultants provided nonpublic information to investors, these people say.
SAC, Wellington, Janus and Citadel were among the clients of John Kinnucan, an analyst who recently was questioned by two FBI agents. The agents visited Mr. Kinnucan last month and accused him and his clients of trading on inside information, according to an email Mr. Kinnucan sent to about 20 clients. The FBI asked him to tape his calls with SAC, according to a person close to the situation. In his email, Mr. Kinnucan said he refused to tape any calls.
Still another strand of the probe is examining whether Goldman Sachs Group Inc. bankers leaked information about transactions, including health-care mergers, in ways that benefited certain investors, the people say. Goldman declined to comment.
On Oct. 26, the day after the FBI visited Mr. Kinnucan, agents visited a Primary Global vice president at his home, people familiar with the matter say.
FBI agent B.J. Kang, who was involved in last year's Galleon Group insider-trading case, asked most of the questions, which focused on an expert in the semiconductor industry who consulted for clients of Primary Global and several other expert-network firms, these people say.
The executive was asked about the firm's work with the expert, his pay and Primary Global guidelines regarding sharing proprietary, nonpublic information with clients, these people say. Mr. Kang declined to comment.
Primary Global's compliance policies, posted on its website, say experts 'are required to keep in confidence proprietary information acquired by them,' and must not 'breach any agreement with their employers' by working as consultants or sharing prohibited information.
One challenge for expert-network firms is policing their consultants. Such firms hire current or former company employees, as well as doctors and other specialists, to share information with funds making investment decisions.
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