The tiny investor relations firm at the centre of the Galleon hedge fund insider trading scandal must identify the leaker of Google’s earnings if it is to survive.
The government has said that an employee at Market Street, which handles earnings releases for a number of Silicon Valley companies, leaked information that Google would miss second quarter earnings estimates in 2007 to someone who tipped off Raj Rajaratnam, the founder of Galleon. For now, Market Street is still in business and Google hasn’t cut them off.
But that’s only a matter of time, unless Market Street can name the person who was responsible for the leak and make it clear that he or she is no longer connected in any way with the company.
Galleon just announced that it is winding up its funds. Market Street is undergoing a similar near-death experience. No company can justify putting the interests of its investors at risk by disclosing non-public information to an investor relations firm that is leaking the information or staffed by someone who has a history of leaking.
The government has not named the leaker. And it may not get around to naming the leaker until the trial. It has bigger fish to fry. But Market Street cannot afford to wait for the government to make its case.
So far Market Street has remained quiet about the allegations made by the government. It cannot afford to keep quiet. This is do or die time. If it cannot find the leak and plug it, Market Street will sink just like Galleon.