Arthur Samberg is closing down his hedge fund, Pequot Capital Management, saying an investigation by US authorities into allegations of insider trading made its continued operation ??untenable?.
In a letter to clients on Wednesday, Mr Samberg, 68, said he planned to liquidate the company??s core funds and return cash to investors, while spinning out two other funds.
Mr Samberg wrote that public disclosures of the reopening of government investigations into some of his trading activities had ??cast a cloud over the firm and have become a source of personal distraction. With the situation increasingly untenable for the firm and for me, I have concluded that Pequot can no longer stay in business as an investment adviser.?
Mr Samberg said his trading for the core funds in 2001 had been the subject of investigations by the Securities and Exchange Commission and the US Attorney??s Office. He said in the letter that those agencies closed their initial investigations in 2006 without bringing charges but the government??s investigation was reopened late last year.
Pequot??s assets under management peaked at $15bn in 2001, before Mr Samberg split with his star trader, Daniel Benton, who spun out Andor Capital from Pequot. Since then, Pequot??s assets have fallen and investors said it now manages about $3bn.
