The article worth you to read is talked about "CDS Raises Insider Trading Issues"〈www.garp.com/risknews/newsfeed.asp?Category=6&MyFile=2006-10-17-13678.html#〉.
Timothy Johnson said "If you want to get access to information private banks have, you go and buy a piece of a bank loan."
Hedge funds are less regulated till now, if they buy credit derivatives from banks then accessing to some confidential information that not publicly announced yet. You guess what the Hedge Funds would do. In the name of profits, Hedge Funds would utilize the information in the gains on investment.
Reference：GARP Risk News
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