BOSTON -- Hedge fund firm Galleon Group, whose founder has been charged with insider trading, paid $250 million to its Wall Street banks last year and in return received market information that other investors did not get, the Financial Times reported.
New York-based Galleon, which invested $7 billion at its peak last year, became known for pushing its contacts at banks for hints about market developments such as big buy and sell orders, the newspaper wrote.
The newspaper cited unnamed sources who were familiar with Galleon's trading habits at big New York-based banks.
Hedge funds routinely use Wall Street banks to clear trades, help arrange financing and provide research. Most banks bar their employees from divulging details about clients' trading orders to other clients.
Galleon, however, regularly received updates on market developments and pushed executives at the banks that the fund worked with hard for details that other investors did not have, the Financial Times wrote.
Wall Street banks Morgan Stanley and Goldman Sachs were Galleon's top providers of hedge fund services or prime brokerage.
© 2009 Reuters. All rights reserved. Republication or redistribution of Reuters content, including by caching, framing or similar means, is expressly prohibited without the prior written consent of Reuters.
|
