In the Galleon Group insider trading case, the focus has now turned to Warren Buffett’s Goldman Sachs (NYSE: GS) deal, which came during the peak of the financial crisis. The Wall Street Journal, citing a person close to the situation, has reported that before the public announcement of the deal where Buffett’s Berkshire Hathaway Inc. (NYSE: BRK.A) invested $5 billion in Goldman Sachs Group, a director at the bank tipped off Galleon Group’s Raj Rajaratnam about the deal.The revelation strengthens government’s case against Rajaratnam, a hedge-fund titan, accused in the biggest insider trading case in a generation. The government is examining into whether Goldman Sachs director, Rajat Gupta, provided inside information to Rajaratnam. On March 22, the government filed a case alleging that Rajaratnam or “co –conspirators” traded on non-public information about the bank. Last week, the government provided more details of the information, which Rajaratnam allegedly received, including an advance notice about Buffett’s transaction with Goldman.
Buffett invested about $5 billion into Goldman Sachs. The stock jumped on the news. The allegation here is that director tipped off a hedge fund manager before the news was announced. If this is true, it's signficantly more serious than the other allegation even.