Grassley Questions Education Agency's Ties To Hedge Funds

07/29/2011 02:34 pm ET | Updated Sep 28, 2011
  • BEN PROTESS The New York Times

Senator Charles E. Grassley is examining whether Education Department officials disclosed confidential government information to hedge fund managers, including the well-known stock picker Steve Eisman.

The inquiry stems from the agency's recent efforts to overhaul the for-profit college industry, which has been accused of saddling students with huge piles of debt. Expecting tough new rules in the wake of the controversy, Mr. Eisman and other hedge fund traders placed huge bets against the industry. In a letter this week, Mr. Grassley questioned the education secretary, Arne Duncan, about the agency's ties to the hedge fund world and the lack of policies restricting contact with Wall Street players.

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