Henry King, a high profile IT analyst at Goldman Sachs, is reportedly under investigation for leaking insider trading information.
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US authorities, thought to include the FBI, are said to be investigating allegations that King passed on to hedge funds a raft of insider information pertaining to technology companies.
King, who was a senior technology analyst at the bank in Hong Kong, is reported to have advised Goldman Sachs clients on shares in IT firms including Apple, HP and Lenovo. The Wall Street Journal, which broke the news, said King typically provided details on the companies’ component supply chains and manufacturing activities in Asia as a measurement of demand levels in the US.
It is not the first time that Goldman Sachs has been drawn into allegations of a senior employee being involved in insider trading. Last year, US prosecutors charged former Goldman Sachs director and former McKinsey partner Rajat Gupta with leaking details of boardroom discussions to jailed hedge fund tycoon Raj Rajaratnam. Gupta awaits trial.
Goldman Sachs had not commented at the time of writing.
The insider trading probe by US authorities, investigating a range of hedge funds and other companies, is expanding quickly.
FBI assistant director Janice Fedarcyk said earlier this month: “The FBI has arrested more than 60 people in ‘Operation Perfect Hedge’ [the hedge fund insider trading probe] to date, and this initiative is far from over.
“If you are engaged in insider trading, what distinguishes you from the dozens who have been charged is not that you haven’t been caught; it’s that you haven’t been caught yet.”
Goldman Sachs had retained a close relationship with Galleon over the years, the WSJ reported, even though it has said any alleged wrongful actions by former employees would be strictly against company policy. Goldman Sachs chief executive Lloyd Blankfein even testified in the Rajaratnam trial.
King is reported as regularly having spoken to Rajaratnam’s Galleon fund, as well as to Level Global, another hedge fund drawn into the insider trading fund.