A three-year insider-trading investigation shifted into high gear Monday as government agents raided the offices of three large hedge funds, sending shock waves through the financial world. In coordinated raids in New York, Connecticut and Massachusetts, Federal Bureau of Investigation agents seized documents at the offices of Level Global Investors LP, Diamondback Capital Management LLC and Loch Capital Management LLC.

Another hedge fund whose activities are being examined is Chicago-based Balyasny Asset Management LP, the people familiar with the matter say. Balyasny, which reported $1.8 billion in assets under management at midyear, didn’t respond to requests for comment. Get the full story »