Business

New hedge fund from Diamondback founder

Richard Schimel, co-founder of Diamondback Capital Management, will start a new hedge-fund firm, called Sterling Ridge Capital Management, in the fourth quarter to trade global stocks, according to a letter sent to potential investors.

Diamondback, which was founded by Schimel and Lawrence Sapanski in 2005, closed following client withdrawals after three of its employees were charged with insider trading as part of the government’s multiyear probe.

Schimel, 45, will open Sterling Ridge Capital Management with 11 employees, seven of whom previously worked at Diamondback, which shut last year.

Schimel is the brother-in-law of Steven Cohen, the embattled head of SAC Capital Advisors, which is currently under federal indictment for fraud.

Investors who withdrew their funds from SAC following the filing of the federal charges are due to be repaid in the fourth quarter, about the same time as Schimel will be opening his new venture.