(Bloomberg) -- The Securities and Exchange Commission is probing an incident at Two Sigma Investments LP, where a researcher tampered with the quant-investor’s models, according to a Wall Street Journal report on Sunday. The changes the researcher made led to $450 million of gains in funds where employees invest alongside external investors, and losses of $170 million largely borne by clients, the Journal said. Two Sigma told investors about the misconduct in a letter earlier this month and said at the time that it would consider compensating investors for any losses. Earlier this year, the firm said a falling-out between its billionaire co-founders had become so strained that it qualified as a material risk. The tensions were already affecting the ability of employees to fully implement key research, engineering or business initiatives, according to the filing.

Source: Wall Street Journal October 29, 2023 19:43 UTC