Photo: Wikimedia Commons
The bombshell reports from Bloomberg Markets delving into the events that transpired amid the 2008 financial crisis just keep coming, and this time it concerns some dubious actions by former Treasury Secretary Hank Paulson.The newest expose by Richard Teitelbaum reveals that in July 2008, then-Treasury Secretary Paulson met with several hedge fund managers and told them that a government takeover of Fannie Mae and Freddie Mac was a very real possibility.
Just a week prior to that meeting, he had testified in the Senate and told media outlets that government intervention in Fannie and Freddie was near impossible.
In case anybody needs a refresher: Fannie and Freddie were infamously bailed out by the federal government on Sept. 6, 2008.
Paulson, as many know, is famous for being the CEO of Goldman Sachs from 1999 to 2006. The entourage of hedge funders he addressed that day included at least five former Goldmanites who had gone into the hedge fund industry. They also included…
… such boldface names as Lone Pine Capital LLC founder Stephen Mandel, Dinakar Singh of TPG-Axon Capital Management LP and Daniel Och of Och-Ziff Capital Management Group LLC.
Bloomberg Markets notes that the group of managers could have profited off the the information Paulson gave them, but it is not clear if the hedge funders at the meeting were trading Fannie and Freddie shares at the time and it is near impossible to track “firm-specific short stock stales” using public documents. There has been no evidence that the managers traded on Paulson’s information.
Law professors told Bloomberg that Paulson “broke no law” despite disclosing non-public inside information.
NOW WATCH: Money & Markets videos
Business Insider Emails & Alerts
Site highlights each day to your inbox.