… is what Galleon paid the investment banks that acted as its brokers, including Goldman Sachs and J.P. Morgan.
For that, Galleon expected, and got, more than brokerage. It got information about trading by the banks’ other clients, which Galleon could use to its advantage and the disadvantage of the firms that thought Goldman and Morgan were working for them. And no one blew the whistle.
If you suspected that those enormous bonuses investment bankers pay themselves weren’t actually being earned, you can chalk up a little bit more evidence.
It appears that this wasn’t “insider trading,” as defined by law. As always the scandal isn’t what’s illegal, it’s what’s legal.
That should be a huge story. Maybe it will be in a few days. I certainly hope so.
Quiddity, it’s certainly a huge story in the IT world, given the involvement of senior execs at IBM, Intel and (I think, but may be wrong) AMD. See here: http://search.theregister.co.uk/?q=galleon
On the contrary, those enormous bonuses were indeed being earned. See how much value Morgan and Goldman added for Galleon.
This scandal, along with the one about Goldman secretly buying CDS’s against mortgage-backed securities it was underwriting as AAA, show just how much of the profit in the financial market is produced by deliberate information asymmetries. (Which of course free market fundamentalists say should not exist.)