Judge Says Hedge Funds May Have Used Inside Information

[xchrom]

http://dealbook.nytimes.com/2011/09/14/judge-says-hedge-funds-may-have-used-inside-information/

There have long been whispers on Wall Street that hedge funds have hijacked the bankruptcy process, using their influence as debt holders to obtain and trade on insider information about when and how a company will restructure.

A federal court ruling highlighted such concerns late Tuesday when a judge raised the possibility that four large hedge funds might have used confidential information to trade in the debt of Washington Mutual.

The issue was raised amid the derailment of Washington Mutual’s emergence from bankruptcy protection, the final chapter in the largest bank failure in the nation’s history.

Judge Mary F. Walrath, in dismissing a proposed settlement in the federal bankruptcy court in Delaware, wrote that four hedge funds that had played a role in Washington Mutual’s restructuring might have received confidential information that could have been used to trade improperly in the bank’s debt.





***ya think?:eyes:

[nashville_brook]

1. you said it best xchrom....

"ya think?"