Google suspends Market Street Partners

22 Oct 2009, 11:05 am   -   Source: Reuters
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SAN FRANCISCO (Reuters) - Google Inc has suspended the services of investor relations firm Market Street Partners, the tiny firm federal investigators said tipped off hedge fund traders on Google's 2007 earnings.

SAN FRANCISCO (Reuters) - Google Inc has suspended the services of investor relations firm Market Street Partners, the tiny firm federal investigators said tipped off hedge fund traders on Google's 2007 earnings.

"Although they are a vendor, we have suspended their services pending the completion of our independent investigation," Google spokesman Matt Furman said on Wednesday.

On Tuesday, Google had said Market Street Partners remained a vendor. Furman declined further comment.

Regulators said in a complaint that an employee of the San Francisco-based firm leaked information on Google's second-quarter 2007 earnings to an informant working with Galleon Group, the hedge fund at the center of the insider trading scandal.

Based on the information, Galleon made trades that netted it $9 million in profits -- the largest of the disclosed illegal trades.

Google is the largest of about 60 companies listed on Market Street's website.

Galleon on Wednesday told employees and investors it would liquidate its funds despite a strong year.

Last week, federal investigators brought criminal charges against Galleon founder Raj Rajaratnam and five others in what is the largest hedge fund insider trading case in history.

(Reporting by Clare Baldwin in San Francisco, and Anupreeta Das and Emily Chasan in New York; Editing by Richard Chang)

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