Galleon paid banks millions for ‘edge’

[AllentownJake]

The Galleon hedge fund at the centre of an insider trading scandal paid hundreds of millions of dollars a year to its Wall Street banks and in return regularly received market information that would not have been disclosed to most investors, executives familiar with the matter say.

A person familiar with Galleon, whose founder, Raj Rajaratnam, was charged with insider trading this month, said it paid about $250m to its banks last year. Executives who dealt with the fund said it paid more in fees and other charges during the boom years of this decade.

Morgan Stanley, which counted Galleon as one of its top-five hedge fund clients, and Goldman Sachs were Galleon’s top providers of hedge-fund services – or prime brokerage.

http://www.ft.com/cms/s/0/9b7b329e-c400-11de-8de6-00144feab49a.html

I'm so glad we bailed out these honorable institutions. I hope some Goldman execs go to jail for this, if they aren't hiding out in the Treasury department.

[slipslidingaway]

1. knr nt