Google suspends investor relations firm named in shares scandal
Ripples from sinking Galleon
Google has suspended a firm it uses for investor relations advice after the SF-based consultancy was implicated in the Galleon hedge fund insider trading scandal.
Regulators investigating alleged insider trading linked to Galleon say an employee of Market Street Partners leaked information on Google's Q2 2007 numbers to one of Galleon's informants, Reuters reports.
This single nugget of allegation apparently netted Galleon $9m in trading profits, the biggest of the illegal trades regulators say they have unearthed.
Market Street Partner's lawyers are reported to have said that neither it nor any current employees have been implicated in the investigation, and that it was considering whether it should take action against a "former employee".
A senior IBM exec, Robert Moffat was suspended by Big Blue after the scandal broke last Friday. Moffat was charged with disclosing information which was passed to Galleon. An Intel employee was also arrested by investigators.
On Tuesday Google said that Market Street was still a supplier. By yesterday it was telling news services that it had suspended the firm pending an investigation.
For its part, Galleon is reportedly rapidly turning its holdings into cash as its clients demand it redeems their investments.
While Market Street Partners has been described as a tiny firm, it has an impressive roster of clients. While Google is the biggest, other tech clients include Ariba, BlueCoat Systems, Electronics for Imaging, and NetSuite. ®