Settlement of $9M for hedge fund in insider case (AP) (25-01-2012)

WASHINGTON – As it is cooperating with the Government investigation, a hedge fund that has been named in a massive insider-trading case will pay $9 million in settlements but won't be prosecuted.

Diamondback Capital Management agreed to pay a $3 million fine to settle civil insider-trading charges filed by the Securities and Exchange Commission, the SEC said Monday. The agency had accused Diamondback of insider trading in shares of Dell Inc. and Nvidia Corp. in 2008 and 2009.

The hedge fund also will forfeit $6 million in alleged illegal profits in an agreement with the Justice Department. The department won't prosecute Diamondback, based in Stamford, Conn., as long as it continues to cooperate.

The government unveiled the case last week, charging a co-founder of hedge fund Level Global Investors with engineering a trade that netted a stunning $53 million in profits. The SEC said the case involved closely linked traders at Diamondback and Level Global, based in Greenwich, Conn.

Source: AP