Tuesday, November 29, 2011

Hank Paulson Tipped Off Goldman Sachs on Fannie Bankruptcy 7 Weeks Prior to Announcement

It's About Time We
Break This Thing In
Zerohedge has just released blockbuster allegations regarding insider trading in Fannie Mae by former Goldman Sachs employees, courtesy of info provided by then Treasury Secy Hank Paulson.
The gathering comprised some of Wall Street's most storied investors. Mindich, a former chief strategy officer of New York- based Goldman Sachs, started Eton Park in 2004 with $3.5 billion, at the time one of the biggest hedge-fund launches ever.
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.

 The manager who described the Eton Park meeting says he also discussed it with an investigator from the FCIC. The discussion was confirmed by a former FCIC employee.
That manager says he ended up profiting from his Fannie Mae and Freddie Mac positions because he was already short the stocks. On his lawyer's advice, he stopped covering his short positions and rode Fannie and Freddie shares all the way to the bottom.
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