Balyasny Said to Be Under Examination: Will Feds Bring Down Hedge Hammer in Windy City?

Having made three stops in New England yesterday, the authorities’ traveling crackdown caravan may soon head to Chicago. Balyasny Asset Management, a Windy City-based fund with about $1.8 billion under management as of the end of the second quarter, is “being examined,” according to Susan Pulliam of The Wall Street Journal.

There’s not much else to go on today, but Journal blogger Shira Ovide points out that according to an November 2009 Journal story, the feds were looking at Mark Adams, a Balyasny analyst, for possibly offering inside information on data-management firm EMC amid a far-reaching insider-trading probe of the Galleon Group hedge fund. After an internal review, Balyasny said it found no evidence of wrongdoing. By the way, Adams used to work for Steven Cohen’s hedge fund behemoth, SAC Capital. Two Connecticut hedge funds visited by the FBI yesterday are offshoots of Cohen’s funds.

Founded in 2002, Balyasny is kind of an odd duck, in that it makes clients pay for its expenses. In late September, Bloomberg reported that the fund had lowered investor fees to boost its asset portfolio. On Nov. 3, Dmitri Balyasny, the firm’s namesake founder, appeared at the Chicago Invest for Kids conference alongside such money-managing bigwigs as Greenlight’s David Einhorn and Citadel’s Ken Griffin.

mtaylor [at] | @mbrookstaylor