Insider buying legality

[Vincent L.]

Last year I was looking to buy an REO (from a small local bank), and went through several bid rounds. First round, the broker held my bid and shopped it around, until she found one she liked. I didn't win the bid, and it went to contract with another buyer. Then it went back on the market because that buyer couldn't get financing. I bid again, but didn't get the place. Then it went back on the market again, this time because of a bad inspection (I'm an engineer, so I knew what I was getting into). I then bid again, only to lose on that bid as well. I wrote it off as a learning experience, and got on with my search for a place.

Today someone at work asked me about buying an REO in the area, and what resources to use, so I poked around my various sites to give him some recommendations. Out of curiosity, I googled the house I was trying to buy, and then for some reason I looked up the current owner, which turned out to be an LLC holding company. I googled the company, and the only info that came up was the names of the owners. For some reason, I googled the first name, and it turns out the owner of the company is the president of the bank that had foreclosed in the first place!

Is this just really scummy behind the scenes dealing, or is it somehow illegal? I don't plan on doing anything about it either way, I'm just curious what the story is...