Last weeks settlement with hedge fund Canary Capital Partners may be just the tip of the iceberg, as 11 more hedge funds were subpoenaed, with at least one possibly committing the same sins are Canary, according to reports.
Details continue to emerge daily suggesting the scope of the investigation could turn monumental very quickly. Hedge fund Samaritan Asset Management may have conducted the same kind of trading practices that led to Canarys $40 million settlement with New York Attorney General Eliot Spitzers office, Bloomberg reports.
The claim involving Samaritan, a $200 million hedge fund based in Barrongton, Ill., lies within the pages of the Spitzer complain against Canary. A spokesman for Spitzers office declined to comment whether Samaritan received a subpoena or if it was a target of the probe. However, he did say hedge funds are a part of the probe, which is concentrating on mutual funds. Samaritan is run by Edward Owens, a former stock broker.
Spitzers office has also subpoenaed as many as 11 additional hedge funds, The Wall Street Journal reports. Included are the Bermuda-based Tewksbury Capital Management, manager of $3.5 billion in assets. The subpoenas are looking for information about late trading and market timing. Haider Capital Management and Samaritan are among the firms Spitzers office has sought information from.
Additionally, Andrew Goodwin, a former Canary employee who founded hedge fund Goodwin Trading Corp., has told investigators about late trading practices and is a central figure in the attorney generals probe. Goodwin has said he himself is not under investigation, has not been involved in late trading and has not had any arrangements with mutual fund companies that would allow his firm after-hour trading capabilities not available to other investors.