Wall St about to be charged by FBI

"Goldman In Insider Trading Probe?"

"News leaked out today that the feds will soon be herding a whole pen full of Wall Street firms into court on insider trading charges, including, reportedly, our old friends Goldman, Sachs.

The basic charge here is that investment banks and other firms were leaking insider info about things like mergers to closely-allied hedge funds, who in turn placed the requisite bets on or against the companies in question."

http://www.rollingstone.com/politics/matt-taibbi/blogs/TaibbiData_May2010/236328/83512

I'm getting some double butter popcorn. This plus put backs and Ireland asking for aid, ummmmmmm. A triple screening. Awesome!

Don't forget the $40 billion corruption scandal in India -- the darling of the emerging markets-- in the telecommunications industry. Oh Oh. And let's all watch the coming attractions -- Spain.. Load up on that popcorn W67. You'll be sitting thru quite a long show.

"Authorities may be close to filing insider trader cases"

"(Reuters) - Federal authorities may file a series of insider trading cases against hedge fund traders, consultants and Wall Street bankers within weeks, several lawyers familiar with the situation said.

Prosecutors and securities regulators are likely to file a number of cases targeting the $1.7 trillion hedge fund industry rather than a single spectacular case, said the lawyers, who have knowledge of the investigations but did not want to be identified since details have not been made public.

The new round of prosecutions could start in the next few weeks or early next year, the lawyers said, but it is too soon to say whether they will rival last year's arrest of Galleon Group hedge fund manager Raj Rajaratnam and nearly two-dozen others, one of the largest insider trading cases ever."

"Federal authorities may need to move quickly if they are going to charge Hollander in connection with trading in Alberstons shares because the five-year statute of limitations for bringing an insider trading case expires early next year.

Indeed, lawyers said one reason authorities may be gearing up to file a new round of insider cases is because of the five-year statute of limitations. A number of the buyout deals under scrutiny involve deals from 2006 and 2007"

http://www.reuters.com/article/idUSTRE6AK1QV20101122

out with the old and in with the new

"FBI RAIDS TWO CONNECTICUT HEDGE FUNDS"

"Diamondback runs about $5.3 billion and is located in Stamford, the same town as SAC Capital. The firm owns or owned HGSI, the investment that triggered rumors of insider trading by Chip Skowron at FrontPoint, so that may be why the firm was raided."

"Level Global, founded in 2003 by David Ganek fellow SAC alum Anthony Chiasson, manages around $4 billion."

http://www.businessinsider.com/diamondback-and-level-global-hedge-funds-raided-wsj-2010-11

this is gonna get ugly

I wonder if all these crackdown are really "in the name of justice" or just a way to refill the Federal safe...
Any way, they get my blessings...

Third fund raided:

"The third, Loch Capital Management, based in Boston, is headed by Timothy and Todd McSweeney. The brothers are acquaintances of Steven Fortuna, a hedge-fund manager who pleaded guilty in the Galleon case and agreed to cooperate in that investigation, the Journal said."

http://www.cnbc.com/id/40317921

"this is gonna get ugly"

Yeah, popcorn prices could get really out of hand. I'd better stock up before w67 corners the market.

People pay good money to have their funds managed by those with inside information!! If people wanted honest performance they'd go with an index fund or manage the money themselves.

I wonder if they'll get one of my x-boyfriends.

S.E.C. Smarter About Insider Inquiries, Official Says
By AZAM AHMED
Reports that authorities are at an advanced stage of insider trading investigations are the talk of Wall Street.

On Monday, a Securities and Exchange Commission official tried to put the inquiries into perspective.

Speaking at a conference on hedge fund enforcement and regulatory developments at the Practicing Law Institute, Scott Friestad, associate director of the S.E.C.’s enforcement division, said just 7 percent to 8 percent of cases brought by the agency are insider trading cases, despite the disproportionate attention that those cases get.

He said the investigators have grown much smarter about conducting these investigations. At first, they were examined in one-off instances, following a specific event like a merger.

“There’s a lot more patterns and serial insider trading than we thought had occurred,” he said. “Many of these players have repeat access to insider trading.”

Mr. Friestad said in addition to learning how to identify and investigate these patterns over the last few years as cases have increased, technology has also improved their ability to find leads in cases.

These technology tools allow them to look at vast amounts of data for indicators like suspicious trading just before a merger is announced or other implausible actions that may have occurred across a wide array of firms.

http://dealbook.nytimes.com/2010/11/22/s-e-c-smarter-about-insider-inquiries-official-says/?nl=business&emc=dlbka4

I have been asked a few times to join such "expert networks." Always seemed fishy to me, seems I was right.

"He said the investigators have grown much smarter about conducting these investigations."
now that there's been a huge public outcry against wall street and reform has been demanded.

I'm so excited I can barely contain myself. I'm with you 67 get out that popcorn with lots and lots of butter. I hope that I'm not disappointed! GO and get em

FLMAOzzzzzzzzz,all you losers rejoicing in other's misfortune with 67 leading the way. You losers can't make it yourself, so you celebrate other's failures.

julialg, what would you like to happen with these people if the alleged criminal activities are true? Should we all be sad for them? Why do you find yourself empathizing with them?

FYI, this is coming from someone who you would consider "has made it".

in the large one's free-market world this is just the top dog looking out for himself.

forget rules and regulations. let the most clever with the most access to information reap the rewards.

it's not easy being rapacious, you know.

julialg - To paraphrase you, it is like saying" You losers don't know how to pick a lock, open the locked door and steel a poor guy's shiny bike that he was slaving at work for months and finally purchased as his kid's Christmas present. So you celebrate when a thief is caught red-handed trying to sell the bike on the street." Is that what you are saying julialg?

Remember, these guys unfairly enrich themselves with the money that we entrusted them to manage. Trading success does not equal theft. When the time comes, I hope these "Masters of the Universe" remember to avoid dropping the soap in the prison shower.

Thieves like madoff should be punished as harshly as possible. But the government creates all these grey zones and when politically convenient they pick and choose winners and losers. Think of the abortion of the tax code. Probably anyone could be 'persecuted' for anything. The government accuses you, you're assumed guilty(look above) and you go broke defending yourself.

Julia - will you be implicated in this FBI probe? Wonder why you are so upset about it.

"julia - will you be implicated in this FBI probe? Wonder why you are so upset about it." No. I despise government thuggery.

The government is well known for turning the blind eye to a certain types of crime. As an example you can look at all the turnstile jumping that was rampant in NYC subway system until mayor Giuliani started cracking down on the quality of life crimes. The crimes were being committed, it is just there was no will on the part of the authorities to do anything about them until Giuliani was elected. We are all better for it reaping the rewards of the safer, cleaner and more livable city. By the analogy, if we don't have a level playing field in the financial system, the erosion of trust by the investors - or the guys who provide the capital to the brokerage houses will cause diversion of the capital elsewhere causing the damage to the financial system which in time will begin looking like the NYC under the stewardship of mayor Dinkins - figuratively speaking.

I am therefore happy when FBI and the SEC are going after the turnstile jumpers and the public urinators of the financial system.

Good idea izze... Let's handcuff and give a perp walk to the evil wall street guys. If the law is ambiguous, the more the better. they probably deserve it anyway. So, if we don't prosecute or we can just shake them down(spitzer),So what, they are corrupt anyhow. The public demands us.We, the government will satisfy the people. Liberty be damned....

The law is pretty clear. Its been on the books for over 70 years. Look it up some time. It would be a better use of your time than making yourself look like an idiot on real estate boards.

Izze: ironically nobody would know who Rudy Giuliani was today if it wasn't for insider trading.

mathus. You're a sad person. giuliani with his gestapo tactics ruined many innocent lives. But, so what, he had to advance his career. What's a few people in the scheme of the greater good, Right malthus?? You're consistently pathetic.

For the recored, I am no fan of Giuliani. I was just making a statement. But I have heard how paranoia and psychoses can get in the way of reading comprehension.

There is nothing ambiguous about what is being alleged...if true, the criminals, and yes they would be criminals, deserve to be thrown in a cell

Whoa?! Hey if you are charged with insider trading, it is the greatest honor/success bestowed on wall street. Mike milken still the dude.

Julialarge reminds me of someone who will twist her own 'morality' Bc she hates the person. I judge all by their actions and words.

Fk if I said taxes were bad, Julialarge would chime in how she is no longer a finnbagger and wants to join a commune in Ibiza.

Watch the thief on cnbc.

Boy he sounds like he's picking locks to rob bikes.

How about the people in the Galleon ring, julialg? How do you feel about those people? You know, the ones that plead guilty, or else the ones who were recorded saying "I could get in a lot of trouble if..."? Victims of grey zone persecution?

How about the politicians in the fannie and freddir ring inonada? How do you feel about those people? Grey zone?

juliathelargeandugly:

the government should be abolished

anyone who disagrees with you is a socialist, european regime follower.

any new news?

"How about the politicians in the fannie and freddir ring inonada? How do you feel about those people? Grey zone?"

I think they are implementing policies desired by Congress. Misguided policies put in place by misguided congressmen elected by a misguided populace, perhaps, but such is democracy. I guess unless we make inonada King of the US, I'll just have to be content with the law of man with the occasional smack-down of those that violate it.

Your turn, answer my question.

If you commit a crime you should be punished.(obviously) If the galleon rings committed crimes they should be convicted. My point was the crowd above shouldn't be rejoicing in other's misfortune. Plus. with all the tax laws and ambiguous 'financial regulations' the gov't will abuse their power. The fbi showed up at this guy's house and intimidated him and bullied him into wearing a wire. Do you approve of that? The gov't is out of control.

"The fbi showed up at this guy's house and intimidated him and bullied him into wearing a wire."
One man's "intimidation and bullying" is another's "you better cooperate because you've already broken the law and if you lie then you're in even more trouble." the guy doesn't have to cooperate...but would he rather go to jail for 15 or 2 years?
if you don't want the hassle of getting caught up in an investigation, then don't play god and break the law with everyone else's money.
i like it when people who think they're getting one over get caught.

Boy you liberals love authority and dictatorial governmental power. Whatever happened to your hatred of the establishment?

I guess once you get a check from the government or some kind of 'benefit' you're on their team.

"Whatever happened to your hatred of the establishment?" - hahaha. but the establishment has morphed into wall street.
by gov't benefits i guess you are referring to unemployment, but keep in mind if you earn over $100,000 per year you pay -0- into social security, but you can still claim your benefit when you file for retirement. sweet!

Zero into social security after paying it up to 106K.

ah. thanks.

no julia we like prudent regulation, such that unfair advantage is minimized

how many kids get forced to wear wires based on their having committted non-violent drug offenses??

our for-profit prisons are filled with non-violent drug offenders

"The fbi showed up at this guy's house and intimidated him and bullied him into wearing a wire. Do you approve of that? The gov't is out of control."

Yes god forbid the cops start doing this broadly. We might wind up imprisoning drug dealers, organized crime figures and terrorists.

Or is it only "out of control" when this is done to guys sipping chardonnay on their front porches?

"how many kids get forced to wear wires based on their having committted non-violent drug offenses??" Completely agree. Drugs should be legalized.

Too bad the SEC wasn't more attentive to the big banks and ponzi schemers all along (even back to Enron, Arthur Andersen). That's all securities fraud is...organized crime.

Enron, reminds me. The great Nobel prize winning economist Mr. paul krugman was an advisor.....

http://www.pkarchive.org/personal/EnronFAQ.html

He got paid from enron. krugman=evil

"Former $50,000 per year advisor and booster of corrupt Enron Corporation, where he said he served on “an advisory panel that had no function that I was aware of”"
hm. what the heck did he do? just on-call 24/7 in case of an emergency?

The great man himself getting paid from the most evil of the evil corporations.

I don't know. He says he resigned before working for the nytimes and was there is answer questions on relevant political/economic issues. It doesn't sound like he orchestrated anything, but no doubt...the Enron name is toxic.

krugman--"Was enron trying to buy mu soul" FLMAOzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzz

unless you have any evidence that he had access to or information regarding enron's accounting practices, your "argument" is useless.

From Wiki: "Enron was named "America's Most Innovative Company" by "Fortune (magazine)" for six consecutive years, from 1996 to 2001. It was on the Fortune's "100 Best Companies to Work for in America" list in 2000, and had offices that were stunning in their opulence. Enron was hailed by many, including labor and the workforce, as an overall great company, praised for its large long-term pensions, benefits for its workers and extremely effective management until its exposure in corporate fraud."

The real question is... How can yo progressives take enron krugman seriously? He's just a hack who sells out to the highest bidder.

Oh yea I forgot. You all really believed in jonnie edwards too.

"enron krugman" -
i guess the same way "conservatives" take bush/cheney/rice/halliburton/chevron/iraq war/and 9/11 seriously. only the conservatives have cost many lives and $$$$$$$$$$$$$$$$$$$$$$$$$$. not just $50K for serving as an advisor. nonetheless, moral relativism is useless.

what moral relativism? if you accept a board position with a company that is at the time well respected and about which you have no negative information, what have you done wrong?

and it was $37,500, but who needs accuracy.

Hey, janey, I hate bush. Just another big government guy. But enron krugman is champion of the little guy , the downtrodden. I would've expected better from him than taking blood money from evil enron.

you've done nothing wrong. i just meant enron is evil and there are other evils in the world, but i don't like comparing them because it's like a vortex.
enron was a big company, then again it was a young reporter named bethany mclean and her editor who asked the right questions and realized the scam. mclean's first article about enron was published March 5, 2001. krugman left in 1999.
i think it's fair to ask, why didn't krugman ask questions or take a closer look? he has the education to know what to look for. whatever. he was on the corporate gravy train. (the krugman version of that, anyway.)

Krugman had no idea Enron was "evil". He was as ignorant about what was going on there as anyone else.

"I hate bush" haha, me too! too bad krugman didn't catch enron. it would've been nice.

Yeah but enron was an energy trading company. Everything the Nobel prize winner economist enron krugman professes to hate. Speculating in energy was enrons business. krugman is a sell out.

krugman wasn't looking at their accounting, he was there to offer generalized economic advice. a potential board member wouldn't be expected to go on a witch hunt when offered a spot at what was a highly respected company. there are plenty of villains associated with enron, but krugman is not one of them, and it's misleading to suggest he was.

but misleading is what some people do best.

oh, and i hate bush as well.

oh, the hell with facts. again from wiki, does this sound like just an "energy trading company?"

"one of the world's leading electricity, natural gas, communications and pulp and paper companies"

i forgot, the esteemed west81st had words of advice re julia the other day: "do not feed the troll"

my bad.

Actually, I believe alanhart put it best: "No feedy the needy"

Another name for it. When you lose the argument use the troll defense.

i didn't see that, sls, but i like it. no feedy the needy.

enron krugman on 'This Week' endorsing death panels. Even though he called Palin a liar for saying the left wants death panels 6 months earlier.
"Some years down the pike, we're going to get the real solution, which is going to be a combination of death panels and sales taxes. It's going to be that we're actually going to take Medicare under control, and we're going to have to get some additional revenue, probably from a VAT. But it's not going to happen now." ( enron krugman)

In defense of Krugman, I hardly see how an Economist should be able to figure out if a business is economically viable.. or fraudulent.

excellent point. agreed

Nobody seems to be discussing Steve Cohen and his ugly divorce...
Hell hath no fury......

like a riversider.

Your cleverness underwhelms me rs. I'm sure hoenig would have intuited the problems just by smelling the corridors.

Tool.

Riversider keep up the good work. You're a great asset to streeteasy.

why?

aboutready It's Hoening with a capital H.....

why is riversider an asset?

The Jersey Housewife who listens to right-wing hate-radio 24/7 is famously unable to spell. She meant "ass-ET", or asshole who's so uncouth she must be from another planet.

The palestinian lover who idolizes the nobel peace prize bus bomber is late to the game today. Either he drank too much or his check didn't arrive.

Why is riversider an asset?

Because riversider adds value.

How?

People come to streetesay to see what riversider posts. Adds value.

Which people?

Julia..perhaps you can add some specificity.

Which people?

fwiw, i read riversider's links. no one else posts links to news anymore, everyone is fighting some strange kind-of-annonymous-but-not-really-since-you've-all-met-in-real-life personal fight.

Fwiw? Very little.

Julia -- Are you able to construct any cogent argument or do you repeat the same thing over and over (which, by the way, is a classic symptom of a psychiatric disorder)? There must be an IQ test for libertarianism -- fail and you can join the club.

lucille, we have not all met in real life. i have only had the misfortune of meeting one of the posters here who i'm not so fond of. the vast majority of the people who have met each other via this venue are not "fighting some strange kind-of-annonymous-but-not-really-since-you've-all-met-in-real-life personal fight."

the fighting is almost entirely anonymous.

it looks like the first person has been arrested from this investigation:
http://money.cnn.com/2010/11/24/news/economy/don_chu_insider_trading_arrest/

Some economists and legal scholars (e.g. Henry Manne, Milton Friedman, Thomas Sowell, Daniel Fischel, Frank H. Easterbrook) argue that laws making insider trading illegal should be revoked. They claim that insider trading based on material nonpublic information benefits investors, in general, by more quickly introducing new information into the market. [20]
Milton Friedman, laureate of the Nobel Memorial Prize in Economics, said: "You want more insider trading, not less. You want to give the people most likely to have knowledge about deficiencies of the company an incentive to make the public aware of that." Friedman did not believe that the trader should be required to make his trade known to the public, because the buying or selling pressure itself is information for the market.[21]
Other critics argue that insider trading is a victimless act: A willing buyer and a willing seller agree to trade property which the seller rightfully owns, with no prior contract (according to this view) having been made between the parties to refrain from trading if there is asymmetric information.
Legalization advocates also question why "trading" where one party has more information than the other is legal in other markets, such as real estate, but not in the stock market. For example, if a geologist knows there is a high likelihood of the discovery of petroleum under Farmer Smith's land, he may be entitled to make Smith an offer for the land, and buy it, without first telling Farmer Smith of the geological data.[14] Nevertheless, circumstances can occur when the geologist would be committing fraud if, because he owes a duty to the farmer, he did not disclose the information; e.g., if he had been hired by Farmer Smith to assess the geology of the farm.
Advocates of legalization make free speech arguments. Punishment for communicating about a development pertinent to the next day's stock price might seem to be an act of censorship.[22] If the information being conveyed is proprietary information and the corporate insider has contracted to not expose it, he has no more right to communicate it than he would to tell others about the company's confidential new product designs, formulas, or bank account passwords.
There are very limited laws against "insider trading" in the commodities markets, if, for no other reason, than that the concept of an "insider" is not immediately analogous to commodities themselves (e.g., corn, wheat, steel, etc.). However, analogous activities such as front running are illegal under U.S. commodity and futures trading laws. For example, a commodity broker can be charged with fraud if he or she receives a large purchase order from a client (one likely to affect the price of that commodity) and then purchases that commodity before executing the client's order in order to benefit from the anticipated price increase.

so now you're advocating that insider trading is to be promoted as its good for the market?

tell us straight, julia.

aboutready, if you're not fond of me you don't have to say so on a public discussion board. You can tell me over sidecars.

MidtownerEast, julialg doesn't say the same thing over and over -- she just posts the canned weekly talking points, pat phrases and sound bites that are disseminated on anti-American websites. You'll never see her posting last week's talking points.

uh...doesn't that just afford rich greedy people the opportunity to exploit even more for their own personal benefit? bethany mclean has a new book out about the financial meltdown. i'm might read it this weekend.
"For example, a commodity broker can be charged with fraud if he or she receives a large purchase order from a client (one likely to affect the price of that commodity) and then purchases that commodity before executing the client's order in order to benefit from the anticipated price increase." - isn't this what GS did? betting on deals tanking while selling the bad deals to the idiot client?

alanhart and aboutready should pick up a Friedman book for the holiday weekend and get a more balanced perspective to their extreme left wing ideology.

"Milton Friedman and other economists have argued, insider trading is actually a good thing. Corporate executives unloading the stock of their own company sends a signal to anyone paying attention that all is not well with that company, and it does so much faster and more completely than any process resulting from government mandates and restrictions.

There is no rational basis for the prohibition of insider trading. It stems, as many have observed, from envy–from a deep socialistic impulse in many people to prevent others from being wealthier than themselves. I give great strategic credit to the socialists that they’ve succeeded over the past century in their propaganda efforts to convince so many Americans that there’s actually something bad and ‘un-American’ about insider trading."