How to Handle Reports That the Feds Have Closed In

Earlier today, three hedge funds went topsy turvy as FBI agents raided their offices and searched for evidence amid a widespread insider trading probe that implicates some of Wall Street’s biggest names. And although many questions remain unanswered, one thing became much clearer today. If you’re a public-relations person at a fund that’s getting swarmed by agents, there’s actually a pretty clear procedure to follow, outlined in a statement released by Level Global to The Wall Street Journal.

Admit the FBI came by, but make sure to choose your verb carefully. “Visited” has a nice ring to it. It’s like the agents rang the doorbell, and you invited them in for a spot of tea. After a rousing game of charades, you sent them on their merry way.

We can confirm that agents from the Federal Bureau of Investigations visited our offices this morning as part of what we believe to be a broader investigation of the financial services industry discussed in media reports over the weekend.

It’s also important to show that it’s not just you. This is part of a “broader investigation,” you believe. Also, of course you are cooperating fully with your visitors. Isn’t that what life’s all about, anyway? Cooperation?

We are cooperating fully with the authorities and, at the same time, we are fully operational and continue to work diligently for the benefit of our investors.

And make sure that at the end, there’s a hat tip to the people who really matter: The Investors. We’d be a lot less sure that this is the protocol had fellow raided hedge fund Diamondback not issued essentially the same statement:

“We received an inquiry this morning from the FBI,” the hedge fund firm said in a statement that was emailed to MarketWatch. “Diamondback is voluntarily cooperating. The firm is fully operational and we, along with our team, continue to manage the portfolio and Diamondback’s business for the benefit of our investors,” it added.

mtaylor [at] observer.com | @mbrookstaylor