According to the indictment, Youngdahl and Peter Davis, a DC-based political consultant, agreed that Davis would leak confidential information to Youngdahl from the Treasury Department’s quarterly refunding press conferences before the information was be made public.
Refunding is the process in which the Treasury issues new securities to obtain funds needed to retire existing debt.
On October 31, Davis attended a refunding press conference where it was announced that the Treasury was suspending the sale of 30-year bonds. Davis relayed the information to Youngdahl who in turn tipped off several traders at Goldman Sachs. The traders bought approximately $84 million in 30-year bonds and roughly $233 million in 30-year bond futures before the news broke.
The Treasury’s decision to suspend issuance of the 30-year bond sparked one of the biggest single-day rallies in the bond market’s history.