John Crudele: Paulson facilitates insider trading

By John Crudele
New York Post
Thursday, September 25, 2008

http://www.nypost.com/seven/09252008/business/bailout_plays_into_bernank...

... It has been fairly well documented (and not by me) that [Treasury Secretary Henry] Paulson was on the phone last week to Wall Street firms telling them that the federal government was riding to the rescue

That's when stocks rallied sharply late last week -- only to fall heavily the first two days of this week.

I've written before how Paulson readily admits that he keeps in touch with "market participants."

How is that not insider trading?

Why can Paulson call up some firms and deliver to them the incredibly important information that the federal government is about to do something and not tell everyone -- including Wall Street firms that are not in the loop as well as the public?

Which brings me back to a very important question I asked last year: When Paulson met with [Federal Reserve Chairman Ben] Bernanke hours before rumors of the first of a series of interest-rate cuts in August 2007, did he share what he had learned with these so-called market participants?

Lesser human beings have gone to jail for such phone calls. His role as treasury secretary doesn't give him immunity from the insider trading laws, even if he thinks his motives are noble.

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