Paulson Tipped Hedge Funds
In the summer of 2008, Treasury Secretary Henry Paulson told reporters—and the Senate—that Fannie Mae and Freddie Mac
should and would remain in the hands of shareholders. He wasn't so
tight lipped with his former Wall Street pals, however. A new Bloomberg Markets
magazine article details how Paulson, a former Goldman Sachs chief,
laid out for certain hedge funds plans for a government takeover of
Fannie and Freddie in July 2008. After the meeting, the lawyer of one of
the hedge-fund managers who attended warned his client that Paulson's
talk was material nonpublic information and he should immediately stop
trading Fannie and Freddie shares.
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