Comments on: HOW LONG WAS GALLEON TRADING ON INSIDER INFORMATION?

By: James Whelan

James Whelan — Tue, 27 Oct 2009 00:45:34 +0000

Galleon has historically run with very low net exposure, -20% to +20%. The 13 fs only tell half the story. There is no requirement to fill short positions of any size. No question, the short positions were driven as much by inside info as the longs. The only way you generate positive performance in tech in 2001 & 2002 is getting a heads up on book to bill well in advance. Get ready for Pequot and MSFT trading next.

By: VM

VM — Fri, 23 Oct 2009 13:29:27 +0000

I dont know that it is possible to make any conclusions about a strategy based on its returns. Just because the returns are good it doesnt mean they are doing something illegal necessarily.

By: TPC

TPC — Thu, 22 Oct 2009 19:07:18 +0000

Yes, the guy walking around in cuffs should be Hank Paulson.

By: James

James — Thu, 22 Oct 2009 19:02:03 +0000

Henry it doesn’t count when it is the government that is giving the insider trading info.

By: TPC

TPC — Thu, 22 Oct 2009 18:52:28 +0000

Interesting. Most HF’s were suffering massive withdrawals last year so the decline in AUM’s isn’t shocking. I’ve glanced over the 13 f’s and his funds basically mirror large indices. I have no idea where the alpha comes from. It has to be coming from these missing trades or perhaps he was doing a lot of derivatives and short selling. I have no idea, but it is certainly all very suspicious.

By: Drew Robertson

Drew Robertson — Thu, 22 Oct 2009 18:21:40 +0000

We ran an analysis of Galleon’s 13fs. Here’s the link. http://frscalls.blogspot.com/2009/10/galleon-over-time.html
Look at the precipitous decline in AuM (on the long equity side at least) since your chart peaked. I also looked at the performance over time of individual issues in Galleon’s portfolio. Most were breakeven or losses. Fine if you had a short portfolio losing a lot more. But that doesn’t seem likely as Galleon had a typical overly diversified tech heavy portfolio leaving little to short. In other words, either his returns on the short side were highly leveraged or he’s got some more explaining to do. Which I doubt is near the top of Raj’s Things to Explain list.

By: Henry

Henry — Thu, 22 Oct 2009 18:14:30 +0000

It is possible…Now can we all look at Goldman’s return for the last couple quarters…We may find some insider trading there too

By: James

James — Thu, 22 Oct 2009 15:35:33 +0000

People suggested yesterday’s drop was from Galleon’s forced liquidation of positions.

By: SS

SS — Thu, 22 Oct 2009 15:20:58 +0000

This is so much more rampant than anyone thinks.