Story updated with reports of an additonal firm being searched and a statement from the FBI.

NEW YORK (

TheStreet

) -- The Federal Bureau of Investigation began raiding several large hedge funds Monday as part of its ongoing insider trading probe.

Connecticut-based Level Global Investors and Diamondback Capital Management LLC's offices were being searched by federal law enforcement, according to

Bloomberg

, which cited a spokesperson for the FBI.

A third Boston-Based firm named Loch Capital Management was also being searched,

The Wall Street Journal

reported citing sources familiar with the matter.

The report said that Diamondback declined to comment while Level Global confirmed that agents were at the firm's address.

"The FBI is executing court authorized search warrants as part of an ongoing investigation. This matter is sealed and we will have no additional comment," said a spokesman for the FBI's New Haven office.

Level Global and Diamondback were founded by former employees of

SAC Capital Advisors

, according to a

Journal

report.

Earlier this week the

Journal

reported

that federal officials were investigating alleged insider trading rings encompassing hedge funds, analysts and investment bankers.