How Paulson Gave Hedge Funds Advance Word of Planned Treasury Intervention 2008

One of the things I’m sure that most 99%ers would agree is someone should not be able to profit from insider information, especially when its coming from government.  After the Bear Stearns collapse, Paulson tells the mass media one story and then tells hedge fund managers what’s really going to happen with Fannie Mae and Freddie Mac. One fund manager acted to cover his ass:

The fund manager who described the meeting left after coffee and called his lawyer. The attorney’s quick conclusion: Paulson’s talk was material nonpublic information, and his client should immediately stop trading the shares of Washington- based Fannie and McLean, Virginia-based Freddie. []

Naturally, how to determine if the other hedge funds shorted [another problem with legacy equity systems that I describe in permanent equity] the GSE stocks once they learned this isn’t possible from current financial tracking systems.


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