Tags: Wellington | Janus | Document | Requests

Wellington, Janus Said to Get Document Requests

Tuesday, 23 Nov 2010 03:17 PM

Wellington Management Co. received a request for documents from federal investigators looking into insider trading, according to a person familiar with the matter. Janus Capital Group Inc. also was asked for information.

Wellington said on an internal conference call yesterday that the firm is conducting a review of records, and that it didn’t engage in illegal trading, according to the person, who asked not to be named because the Boston-based firm is private. Janus, based in Denver, said today that it received a request for “general information and intends to cooperate fully with that inquiry.”

Federal officials, led by U.S. Attorney Preet Bharara in Manhattan, are investigating whether money managers may have profited from insider trading, or buying and selling based on material, nonpublic information. The offices of hedge funds Level Global Investors LP and Diamondback Capital Management LLC, run by former traders of Steven A. Cohen’s SAC Capital Advisors LP, were searched yesterday by agents from the Federal Bureau of Investigation.

“This is going to go beyond hedge funds,” said Stewart Massey, chief investment officer at Massey, Quick & Co. in Morristown, New Jersey, which manages $2 billion on behalf of endowments, foundations and wealthy families. “This is going to involve traditional money managers also.”

In a call today, Wellington officials disclosed the document request, without specifying what kind of information investigators are seeking, the person said. Sara Lou Sherman, a spokeswoman for Wellington, declined to comment.

Mutual Funds

Janus, Wellington and mutual-fund company MFS Investment Management in Boston were clients of Broadband Research LLC, a Portland-based research firm that was visited by FBI agents last month, the Wall Street Journal reported on Nov. 20.

John Reilly, a spokesman for MFS, declined to comment.

Janus “maintains rigorous compliance procedures” and “has confidence in the integrity of its processes and its people,” Shelley Peterson, a spokeswoman for the firm, said in the e-mailed statement.

Wellington, a closely held company that traces its roots to an investment firm formed in 1928, is led by Chief Executive Officer Perry Traquina. The firm manages about $598 billion in assets in mutual funds and separate accounts for institutional investors, such as endowments and pension funds, and mutual funds for investment firms including Vanguard Group Inc.

The $52 billion Vanguard Wellington Fund gained an annual average of 5 percent in the past five years, beating 89 percent of rival funds, according to data compiled by Bloomberg.

Banker’s Testimony

Jessie Erwin, a spokeswoman for Bharara’s office, and Richard Kolko, a spokesman for the FBI, declined to comment.

Yesterday’s raids follow testimony by a former UBS AG investment banker at a criminal trial in September that he “provided confidential information” to a friend who worked as an analyst at SAC.

Fourteen people have pleaded guilty in the Galleon Group insider trading case brought by Bharara last year as he initiated the crackdown, and at least nine others have been charged. Raj Rajaratnam, the founder of Galleon, has denied wrongdoing and is scheduled to go on trial next year.

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