Surprise! Hedge Funds trade with inside information. Whocoudanowd?!

Arthur Samberg, the CEO and Chairman of Pequot, a giant hedge fund is coming close to being the guy who rips the band-aid off the fact that hedge funds use inside information to generate their returns.  A complex Portfolio.com article outlines how he uses inside information gained from a contractor to trade Microsoft's earnings to great success (+$12MM).  This could be the match that lights the tinder of the fact that a lot more of the hedge industry uses inside information than you would believe.  Gerson Lehrman, a firm that sets up conference calls between "industry consultants" and hedge fund investors, has built a multi-hundred million dollar business based on this model.  They have been finding people within companies for years and brokering calls with hedge funds.  Hedge funds pay big money for these calls because they can usually pump the industry consultants -- people who work in big companies but are moonlighting on the side who may or may not know they're being pumped for information.

It's an offense to all of the other investors who are just trying to play the game fairly.  And at some point, this scheme will be revealed.  Maybe.