Washington Intelligence Fetches Top Dollars from Hedge Funds

October 04 00:00 2011

New York, October 4 (RainbowNewsLine.com) – Intelligence gathered from innocuous shop talk between political insiders can prove to be very valuable as hedge funds pay good money for the same. Wall Street investors are hungry for information from Washington insiders who have them. Even a casual remark in a conversation between senators can yield information that can prove to be very profitable for investors.

Hints of upcoming government regulatory changes and economic initiatives and even minor shifts in policy can be of great interest to hedge fund managers. As such, they have been digging deep inside the government and paying thousands of political insiders. Even private-equity firms and other big investors follow the same trend.

SAC Capital Advisors and Eton Park Capital Management have hired former congressional staffers and Paulson & Co has appointed former Federal Reserve Chairman Alan Greenspan as an adviser. Former Treasury Secretary John Snow works for Cerberus Capital Management.

Lobbyists are in great demand as they pick up information during conversations with lawmakers, congressional aides and other government officials. “I have information from doing my day job as a lobbyist,” explains one lobbyist. “That information has value on Wall Street. So I sell it.”

Security laws ban trading on the basis of material nonpublic information about public companies but sharing nonpublic information about government affairs is not prohibited.