According to Reuters Diamondback Capital Management, one of
a handful of firms embroiled in a government insider trading investigation,
told investors it would close down after nervous clients demanded the return of
more than a quarter of its assets.
Richard Schimel and Larry Sapanski, the firm's co-heads,
broke the news to clients in a letter Thursday just three weeks after investors
asked Diamondback to return $520 million, five times the amount top executives
had expected.
As assets dwindled to $1.45 billion from about $5 billion
two years ago, the firm's business model was in jeopardy and executives had to
decide between closing the firm down or trying to engineer a second big
restructuring within 18 months…..
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