Tuesday night at 10:00 pm ET, PBS’s Frontline will air “To Catch A Trader,” a documentary about insider trading on Wall Street with a focus on Steve Cohen’s SAC Capital.
Naturally there’s an assortment of journalists and FBI agents talking about SAC (and Raj Rajaratnam’s Galleon Group), but perhaps the most interesting person interviewed is Turney Duff, author of ‘The Buy Side: A Wall Street Trader’s Tale Of Spectacular Excess.‘ Duff worked at Galleon.
Duff is open about the fact that he went out to clubs and restaurants at night searching for “edge” — any information that could help Galleon trade, like what might end up on the cover of Barron’s that week.
He’s also open about the first time he made an insider trade. Duff was manning the phones at Galleon while Rajaratnam was out. He picked up the phone and a voice whispered that Jefferies would be upgrading Amazon.
After wrestling with himself a bit, Duff ended up buying 100,000 shares of Amazon.
“If I got calls like this I’d be a great trader too,” he said. “I need my own Mr. Whisper.”
As you may recall, the FBI tapped Galleon Group’s phone during its investigation into the hedge fund. Agents told Frontline that since traders were talking stocks all day, it wasn’t always easy to determine what was inside information and what was just talking shop.
Duff’s story seems like one of the easy ones.