The WSJ is reporting that the SEC is looking at specific Health Care takeovers that seemed to be tipped in advance to several big hedge funds. The chart (above) shows the extent and timing.
There are many legal reasons to have owned these names, but the issue here is whether or not the funds received material non public inside information about the takeovers from their “expert networks.” If that turns out to be the case — and so far, we do not know if it is — it would be problematic.
Are these so called expert networks nothing more than good old fashioned inside M&A information being exchanged for cash? If that was the case, there will likely be jail sentences . . .
Holdings Spiked Near Deal Time
JENNY STRASBURG, MICHAEL ROTHFELD, TOM MCGINTY and SUSAN PULLIAM
WSJ, December 2, 2010