Former Treasury Secretary Paulson Gave Insider Information To Hedge Fund Buddies

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"Former Treasury Secretary Paulson Gave Insider Information To Hedge Fund Buddies"

According to Bloomberg News, former Treasury Secretary Hank Paulson, who was at the helm when the financial crisis hit in 2008, leaked inside information regarding the government takeover of mortgage giants Fannie Mae and Freddie Mac to several hedge fund traders, including former colleagues of his at Goldman Sachs. There’s no evidence that the traders used the information, as “tracking firm-specific short stock sales isn’t possible using public documents,” but at least one trader contacted a lawyer and was told that “Paulson’s talk was material nonpublic information, and [he] should immediately stop trading” Fannie and Freddie. As Reuters’ Felix Salmon put it, “Paulson was giving inside tips to Wall Street in general, and to Goldman types in particular: exactly the kind of behavior that ‘Government Sachs’ conspiracy theorists have been speculating about for years.”

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