Galleon hedge fund’s owner Raj Rajaratnam was charged with insider trading. It paid around $250 million to its banks this decade. Morgan Stanley (NYSE: MS) and Goldman Sachs (NYSE: GS) were Galleon’s foremost hedge-fund service providers.
Galleon’s short term trading strategies had it pay huge amounts to banks. Its employees also had to remain in close contact with salespersons and traders at Wall Street. Large buy and sell orders, important market developments and discussions on “one page sellers” of shares became common place with its officials, all such information sharing prohibited by the bank policies.
As a Goldman Sachs executive rightly puts it, “They cared about short-term returns and cared a lot about the impact of their trading and the costs. They expected a lot of market information.” But a leak of corporate information seems to be more of a reason for prosecution than is market information sharing. The case may change the face of high-velocity hedge fund trading for a while, say many a hedge fund owners.
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Article Courtesy of Bezina.com. To view the original article please use the link below:
http://www.benzinga.com/markets/company-news/32323/galleon’s-scandal-may-send-a-chilling-effect-on-market-“color”
No problem! I will just call my GS and MS friends and ask them to share some knowledge. Perfectly legal! Remember the movie Trading Places? I would like the Orange Juice crop reports delivered monthly too. I will even wear a gorilla suit!
It's amazing anyone other than insiders can make a dime.
Who needs charts when you have insider info LOL
I wish I new the guys who keep track of oil inventory so I could back up the truck with the right long or short crude positions. I'd give him half the profits if he let me know the info in advance LOL
If I can't find one these guys, I guess I'll still have to use charts.
You can probably guess that MS and GS might also have been providing advanced information to Galleon on the terms of their forthcoming analyst reports, forthcoming stock upgrades and the like.
There is just nothing like having information on a glowing upcoming stock upgrade before it's released.
But - oh no. This would not be happening its illegal isn't it.
We would like to know what GS consider to be just "market sharing information" though.
So the hedge fund owner is charged but those that were paid and supplied the info are not. Now how does that work under securities laws?