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Old 10-20-2009, 06:55 AM
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Default SEC activity - busts

Think I'll put in SEC busts into one thread. Just to keep track.

http://mobile.bloomberg.com/apps/new...d=aqAAZ8PB9Hto

Quote:
Insider Trading Bust Shows SEC May Have a Pulse: Susan Antilla
Commentary by Susan Antilla

Oct. 20 (Bloomberg) -- The Securities and Exchange Commissionís Big Bust on Friday is an example of everything thatís right, and everything wrong, with the agency thatís been bungling its job of keeping the financial markets safe.

Working with federal prosecutors in New York, the SEC charged hedge fund operator Raj Rajaratnam , whose net worth of $1.5 billion placed him at No. 236 on Forbes magazineís 400 Richest Americans list, with insider trading. Rajaratnamís lawyer, James Walden, says his client is innocent and that ďwe intend to vigorously defend him in court.Ē

With its simultaneous charges against a network of other alleged cheaters on Wall Street and in the C-suite, the SECís case was enough to bring tears to the eyes of Wall Street nostalgia buffs.

The SEC always did have a knack for insider-trading cases, notwithstanding its recent back-and-forth with charges that havenít stuck against billionaire Mark Cuban . The agency sent Wall Street into a collective cold sweat in the 1980s, when the Nov. 14, 1986, news that Ivan Boesky had agreed to pay $100 million for insider trading sent a signal that the jig was up for lawbreakers who swapped illegal inside-information.

The agency was a regulatory mensch back then, working with prosecutors to do the spadework that helped send Boesky, Kidder, Peabody & Co.ís Martin Siegel , and Drexel Burnham Lambertís Dennis Levine and Michael Milken to the slammer. If you can imagine it, Wall Street was actually afraid of the SEC after the Boesky bust.
I remember seeing that guy posted bond -- at $100M ... see last link in post.
Other guy:
http://dealbook.blogs.nytimes.com/20...-put-on-leave/
Quote:
I.B.M. has placed a top executive on leave after he was charged in an insider trading scandal in which he was accused of leaking secrets about the computer makerís earnings and financial dealings with corporate partners.

The International Business Machines Corporation said Monday that Robert W. Moffat Jr., senior vice president of the systems and technology group would no longer serve as an officer of the company, The Associated Press reports. Mr. Moffat had been considered a top candidate to succeed I.B.M.ís chief executive, Samuel J. Palmisano.
More on SEC step up of activity:
http://www.forbes.com/2009/10/19/sec...t-insider.html
Quote:
Friday's arrest of billionaire Raj Rajaratnam, the co-founder of $3 billion hedge fund firm Galleon Management, is one example of Washington's recent zeal to clean up Wall Street.

Targeting high-profile people and making examples out of them is a tactic that could help the Securities and Exchange Commission overcome the stinging embarrassment of failing to detect the multi-decade, $65 billion swindle perpetrated by former Nasdaq chairman Bernard Madoff, even when the scam was spelled out for them by a few sharp-thinking whistle-blowers.

Last year, the SEC filed an insider-trading case against another billionaire, the Dallas Mavericks owner Mark Cuban. Earlier this year, Arthur Samberg, the founder of Pequot Capital and one of the highest-profile investors in the hedge fund world, said he would shut his fund down because of the distraction and pressure coming from an ongoing investigation into his trading. There have been no charges.


Federal prosecutors accuse Rajaratnam and others of securities fraud, while the SEC is pursuing civil insider trading cases against him and five others. (See "Billionaire Arrested for Insider Trading.") Rajaratnam was freed on $100 million bail. His lawyer has said he is innocent and will fight the charges.
More at link.
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Old 10-21-2009, 12:26 PM
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This reminds me of a calculus class where the worst student cheated by copying off the second-worst student. That worked out well.

http://www.nytimes.com/2009/10/21/bu...l?ref=business

Quote:
Raj Rajaratnam, the authorities say, masterminded one of the biggest insider-trading schemes in a generation.

But if Mr. Rajaratnam was trading on insider information, apparently he was not very good at it.

A close examination of the trades that led to his arrest last week reveals a startling fact: In all, Mr. Rajaratnam lost millions from what prosecutors characterize as illegal trading.
I'm sorry, I find it hilarious when something like that happens.
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Old 10-21-2009, 12:29 PM
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Originally Posted by campbell View Post
This reminds me of a calculus class where the worst student cheated by copying off the second-worst student. That worked out well.

http://www.nytimes.com/2009/10/21/bu...l?ref=business



I'm sorry, I find it hilarious when something like that happens.
Isn't it possible though that the authorities had found out about his issues and worked out a way to feed him false information just to verify he was doing it?
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Old 10-21-2009, 12:32 PM
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Originally Posted by Abused Student View Post
Isn't it possible though that the authorities had found out about his issues and worked out a way to feed him false information just to verify he was doing it?
It's possible.

My dad used to do something like that in college - he'd put his slide rule on the wrong answer to let the cheaters copy off the wrong numbers. Then he'd do the real calculations extremely quickly at the end [he told me he oiled up his slide rule to optimize performance.]

Still find it funny. If you were insider-trading, wouldn't you start to catch on if it wasn't working?
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