Monday, February 1, 2010

Neil Barofsky Investigating Insider Trading Around TARP

FT is reporting that Neil Barofsky is investigating insider trading surrounding TARP financing. FT says:
Neil Barofsky, the special inspector-general overseeing the US government’s financial rescue efforts, is to probe allegations of insider trading among bank executives and their associates.

Eight of the largest banks in the US received between $2bn and $25bn in October 2008 under a programme to prop up the financial system led by Hank Paulson, then Treasury secretary.

Dozens more institutions followed and Mr Barofsky, who examines the troubled asset relief programme, is looking into whether information improperly made its way to trading rooms during a feverish period in which the government and banks were frequently exchanging information.

“We have pending investigations looking into that – typically into insider trading,” he said. “Once upon a time getting Tarp funds actually meant your stock price would go up and we are looking at specific trading around Tarp announcements by insiders or looking at potential tips from insiders.”
Will this end up as some show trial where Barofsky busts some bank low ranking traders that are not politically connected, in an attempt to show the angry masses that government is doing something to crack down on banks, or does Barofsky have the balls to investigate and bring a case against real insider traders?

1 comment:

  1. Show trial...definitely show trial. If this was not about politics they would simply abolish insider trading laws. The politicians that have benefited from trades based on govt bailouts used stolen information and can be prosecuted as the thieves they are.

    If Barofsky is using insider trading laws its definitely about the politics and has nothing to do with justice.