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Are Expert Networks About To Be Exposed As The Ringleader In The Biggest Insider Trading Bust In History?

Tyler Durden's picture


Over a year ago, Zero Hedge published an expose in three parts (two of them in the form of direct letters to Andrew Cuomo) discussing the possibility that so-called "expert networks" are nothing less than legalized insider trading rings for the uber-wealthy, operating largely unsupervised, and leaking selective information to preferred clients. For those who may be new to this topic, we suggest catching up on Part 1, Part 2 and Part 3. Subsequently, we also suggested that expert networks would be implicated in the bust of Galleon Partners, the Goldman "Huddle", the collapse of FrontPoint Partners and, most recently, that expert networks may have been directly or indirectly involved in facilitating the record historical P&L of such hedge fund "titans" as SAC Capital. Today, via the Wall Street Journal, we realize that not only have the good folks at the SEC been diligently reading us for the past 13 months, but that we may have been right all along (once again). To wit: "Federal authorities, capping a three-year investigation, are preparing insider-trading charges that could ensnare consultants, investment bankers, hedge-fund and mutual-fund traders and analysts across the nation, according to people familiar with the matter. The criminal and civil probes, which authorities say could eclipse the impact on the financial industry of any previous such investigation, are examining whether multiple insider-trading rings reaped illegal profits totaling tens of millions of dollars, the people say. Some charges could be brought before year-end, they say." Good bye expert networks (and many, many hedge funds) - we hardly knew you. 

More from the WSJ:


The investigations, if they bear fruit, have the potential to expose a culture of pervasive insider trading in U.S. financial markets, including new ways non-public information is passed to traders through experts tied to specific industries or companies, federal authorities say.

One focus of the criminal investigation is examining whether nonpublic information was passed along by independent analysts and consultants who work for companies that provide "expert network" services to hedge funds and mutual funds. These companies set up meetings and calls with current and former managers from hundreds of companies for traders seeking an investing edge.

Among the expert networks whose consultants are being examined, the people say, is Primary Global Research LLC, a Mountain View, Calif., firm that connects experts with investors seeking information in the technology, health-care and other industries. "I have no comment on that," said Phani Kumar Saripella, Primary Global's chief operating officer. Primary's chief executive and chief operating officers previously worked at Intel Corp. (INTC), according to its website.

In another aspect of the probes, prosecutors and regulators are examining whether Goldman Sachs Group Inc. (GS) bankers leaked information about transactions, including health-care mergers, in ways that benefited certain investors, the people say. Goldman declined to comment.

Independent analysts and research boutiques also are being examined. John Kinnucan, a principal at Broadband Research LLC in Portland, Ore., sent an email on Oct. 26 to roughly 20 hedge-fund and mutual-fund clients telling of a visit by the Federal Bureau of Investigation.

"Today two fresh faced eager beavers from the FBI showed up unannounced (obviously) on my doorstep thoroughly convinced that my clients have been trading on copious inside information," the email said. "(They obviously have been recording my cell phone conversations for quite some time, with what motivation I have no
idea.) We obviously beg to differ, so have therefore declined the young gentleman's gracious offer to wear a wire and therefore ensnare you in their devious web."

The email, which Mr. Kinnucan confirms writing, was addressed to traders at, among others: hedge-fund firms SAC Capital Advisors LP and Citadel Asset Management, and mutual-fund firms Janus Capital Group (JNS), Wellington Management Co. and MFS Investment Management. SAC, Wellington and MFS declined to comment; Janus and Citadel didn't immediately comment. It isn't known whether clients are under investigation for their business with Mr. Kinnucan.

Some more on expert networks:The consultants typically earn several hundred dollars an hour for their services, which can include meetings or phone calls with traders to discuss developments in their company or industry. The expert-network companies say internal policies bar their consultants from disclosing confidential information.


And it is not only the SEC who reads us:


Another aspect of the probe is an examination of whether traders at a number of hedge funds and trading firms, including First New York Securities LLC, improperly gained nonpublic information about pending health-care, technology and other merger deals, according to the people familiar with the matter.

Some traders at First New York, a 250-person trading firm, profited by anticipating health-care and other mergers unveiled in 2009, people familiar with the firm say.

A First New York spokesman said: "We are one of more than three dozen firms that have been asked by regulators to provide general information in a widespread inquiry; we have cooperated fully." He added: "We stand behind our traders and our systems and policies in place that ensure full regulatory compliance."

When all is said and done, First New York will only be the beginning.

As for representative transactions, here are some of the initial ones that have been leaked:


Transactions being focused on include MedImmune Inc.'s takeover by AstraZeneca Plc (AZN, ANZ.LN) in 2007, the people say. MedImmune shares jumped 18% on Apr. 23, 2007, the day the deal was announced.

A spokesman for AstraZeneca and its MedImmune unit declined to comment.

Investigators are also examining the role of Goldman bankers in trading in shares of Advanced Medical Optics Inc., which was taken over by Abbott Laboratories (ABT) in 2009, according to the people familiar with the matter. Advanced Medical Optics's shares jumped 143% on Jan. 12, 2009, the day the deal was announced. Goldman advised MedImmune and Advanced Medical Optics on the deals.

A spokesman for AstraZeneca and its MedImmune unit declined to comment.


It appears that if and when the hammer comes down (or specifically if the SEC finally has the guts to file formal charges) those who will have a lot of explaining to do are the who's who in the hedge fund world.


In subpoenas, the SEC has sought information about communications-- related to Schering-Plough and other deals--with Ziff Brothers, Jana Partners LLC, TPG-Axon Capital Management, Prudential Financial Inc.'s (PRU) Jennison Associates asset-management unit, UBS AG's (UBS) UBS Financial Services Inc. unit, and Deutsche Bank AG (DB, DBK.XE), according to subpoenas and the people familiar with the matter.

Representatives of Ziff Brothers, Jana, TPG-Axon, Jennison, UBS and Deutsche Bank declined to comment.

Among hedge-fund managers whose trading in takeovers is a focus of the criminal probe is Todd Deutsch, a top Wall Street trader who left Galleon Group in 2008 to go out on his own, the people close to the situation say. A spokesman for Mr. Deutsch, who has specialized in health-care and technology stocks, declined to comment.


Could the hedge fund industry be about to experience its biggest insider trading bust? As much as we would like to believe so, the day when justice finally prevails over legal fees may still be far away. In the meantime, Zero Hedge is proud to have assisted in the exposure of this latest massive legal insider trading scam which favors the preferred and the wealthy over everyone else, precisely the kind of thing that makes investors hate the capital markets...


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Sat, 11/20/2010 - 12:15 | 743116 Wynn
Sat, 11/20/2010 - 12:29 | 743133 Verum
Verum's picture

+1, thanks for the link

Sat, 11/20/2010 - 14:34 | 743272 Slash
Slash's picture

please....I'll believe it when I hear the guilty verdict given. Until then, nothing but hot air.

Sat, 11/20/2010 - 20:05 | 743563 jules from aus
jules from aus's picture

ditto Slash

... and I love the idea that they are going after 'tens of millions' of dollars - it will only cost these goons that much to settle these claims before anyone has to lift a leg up the stairs to the court door

- just hulla bulloo to get the masses excited for a time, and for dusting off the illusion that the SEC and FBI actually deserve their perverse budgets

good luck

Sun, 11/21/2010 - 10:15 | 744217 Eyes on the World
Eyes on the World's picture

So we should roll and play dead since it doesn't make a difference anyway, right.  I get really tired of people have nothing better to do than complain.  Rome wasn't built (nor destroyed) in a day.

Sun, 11/21/2010 - 14:25 | 744640 Thanatos
Thanatos's picture

Rome wasn't destroyed in a day because thier enemies didn't have weapons systems capable of it.

Had NBC weapons been available to their enemies, I can assure that Rome would have fallen in Minutes not days.

The history is valid, but things have changed slightly in that last 1700 years.

Sun, 11/21/2010 - 10:40 | 744235 MountainHawk
MountainHawk's picture

The wealthy have way too much power and influence not to be able to make this little problem go away. I'm with you, when I see a guilty verdict I will believe it.

Sun, 11/21/2010 - 14:21 | 744634 Thanatos
Thanatos's picture


This is all a smokescreen.

They will put out lots of dense smoke, use a LCD projector to display the movie of "Justice" served onto the smoke.

When the smoke clears, the illusion will disappear, and back to the business of Fraud Inc. we will go.

This isn't GS or JPM up for trial... This is small fish (relatively) that are being cleared off the field.

They are being cleared because they would scream butthurt murder when Phase 2 of Fraud Inc. kicks off and they were left in the cold.

Better to have them quietly off to the sidelines, where they can't cause trouble for the big boys when they start sodomizing us in earnest.


Sat, 11/20/2010 - 13:42 | 743219 Miss Expectations
Miss Expectations's picture

When Martha Stewart was putting together her Martha Stewart Living TV Show and Magazine someone said to her, "Martha people don't live like this."  Martha responded, "No, but they want to."

Sat, 11/20/2010 - 18:17 | 743468 carbonmutant
carbonmutant's picture

The market for something to believe in is infinite...

Sun, 11/21/2010 - 20:07 | 745155 chopper read
chopper read's picture

+1 to both of you. 

Sat, 11/20/2010 - 12:17 | 743118 deadhead
deadhead's picture

I saw the article in the WSJ this a.m. and the first thing I thought was "...gee, ZH spoke out about this ages ago!".


Once again, ZH is correct and way, way ahead of the curve.


Thanks again ZH for being the best financial read on the planet.



Sat, 11/20/2010 - 13:11 | 743182 Fish Gone Bad
Fish Gone Bad's picture

I am not going to jump up and down and scream hallelujah! at the top of my lungs just yet.  Waiting for anyone to do anything to the "favorite children" is really getting old.

Sat, 11/20/2010 - 14:27 | 743264 NumberNone
NumberNone's picture

how long before cuomo is found in a hotel room with 3 whores, a goat, and fifteen pounds of crack coaine?

Sat, 11/20/2010 - 14:56 | 743294 Duuude
Duuude's picture



Yeah...Client #10



Sun, 11/21/2010 - 14:29 | 744650 Thanatos
Thanatos's picture

That was last month, and it was Transvestite Rent Boys, an Alpaca, 3 whores, and 15 pounds of Meth/Crack mix.

Or was that the GS Halloween party?


Sat, 11/20/2010 - 13:38 | 743213 Miss Expectations
Miss Expectations's picture

Thanks again ZH for being the best financial read on the planet and perhaps in the history of the world.

Sat, 11/20/2010 - 22:41 | 743719 Cursive
Cursive's picture


Where you been?  Good to read you again, bro.  ZH is the balls.  Thanks Tyler.

Sat, 11/20/2010 - 12:21 | 743123 FunkyMonkeyBoy
FunkyMonkeyBoy's picture

Yes, but what's the REAL agenda here for pursuing this?

Sat, 11/20/2010 - 14:43 | 743280 Whatta
Whatta's picture

What is always the agenda of government?

Higher taxes and more control.

Look for plea bargins and calls for higher taxes on financial transactions by the guilty, like WB is calling for higher taxes on the wealthy...

Sat, 11/20/2010 - 12:24 | 743128 rubearish10
rubearish10's picture

TD, diluting the enthusiasm with  "As much as we would like to believe so, the day when justice finally prevails over legal fees may still be far away" is so appropriate because the release of this article is to test the waters of market reaction, just to then, impose a mere "slap of the wrist" yet one more time. This will amount to virtually a "non-event" and the SQUID will continue to rule! How sad.

Sat, 11/20/2010 - 12:59 | 743170 Bob
Bob's picture

That would certainly appear to be the intention.  "Tens of millions" . . . is that a joke? 

Tens of trillions is the real story, going back to year 2000. 

Sat, 11/20/2010 - 13:06 | 743177 rubearish10
rubearish10's picture

Yeah, you could say that again!

I once believed this thing would just unravel "that one more time" necessary to "shakeout" all  thugs perpetrating our once beloved "market based" system. How foolish was that?

Sat, 11/20/2010 - 12:30 | 743134 Bananamerican
Bananamerican's picture

"examining whether multiple insider-trading rings reaped illegal profits totaling tens of millions of dollars,"

"And for what? For a little bit of money... There's more to life than a little money, you know. Don'tcha know that? And here ya are, and it's a beautiful day. Well. I just don't understand it."

Sat, 11/20/2010 - 15:23 | 743316 Rick Masters
Rick Masters's picture

That was a great e'ffing movie and one of my favorite lines from it. Fargo.

Sat, 11/20/2010 - 15:50 | 743353 Captain Benny
Captain Benny's picture

Its actually hundreds of millions.  The SEC knows it, they're just willing to settle for a lot less since their lawyers want to stay out of court and just watch more porn.


Sat, 11/20/2010 - 12:38 | 743138 Xibalba
Xibalba's picture


Sat, 11/20/2010 - 12:41 | 743142 drswhaley
drswhaley's picture

The recovery will be cents on the dollar and will be a slap on the wrist (no jail time) and a request that they change their practices to some mechanism we aren't currently operating under but the net result will be the same.  What about officers in companies who are using inside info all the time.?  What about investigating officers at CSCO who sold 60% of their holdings prior to announcing their most screwed up quarter in a long time - we are to expect Chambers walks into the office on earnings release day, and surprise, our numbers are off?  He later apologizes for the miss - however, him and his bank account are smiling and it is now time to offer him lower priced options after the miss.

Sat, 11/20/2010 - 12:47 | 743150 unununium
unununium's picture

Oooooooh, TENS OF MILLIONS!  How Dr. Evil.

The material crimes go unrecognized, uncomprehended and needless to say, unprosecuted.

Perhaps the FBI should make itself useful and crack open Fannie Mae's books.  Christ, Henry Paulson handed 1000 times this amount to Goldman via AIG in a single transaction.


Sat, 11/20/2010 - 15:31 | 743327 SWRichmond
SWRichmond's picture

Agree, tens of millions is chickenfeed to these guys, a mere cost of doing business.  Obviously, they're not going after the big fish, but rather using the FBI to get rid of the competition.


Sat, 11/20/2010 - 16:32 | 743380 midtowng
midtowng's picture

That's what I think to.

The SEC is a joke. Are we supposed to believe they will suddenly start doing their job?

Sat, 11/20/2010 - 16:40 | 743388 Bill Lumbergh
Bill Lumbergh's picture

I had similar thoughts...tens of millions is nothing and frankly the way Wall Street operates I would be surprised if this is not hundreds of millions.

Sat, 11/20/2010 - 21:09 | 743615 StychoKiller
StychoKiller's picture

You're being too conservative, how about 100's of $BILLIONS?

Sat, 11/20/2010 - 12:50 | 743156 godzila
godzila's picture

Not in our liffetime :(

Sat, 11/20/2010 - 12:58 | 743166 Seymour Butt
Seymour Butt's picture

TD, excellent article. 

Sat, 11/20/2010 - 13:01 | 743167 Urban Roman
Urban Roman's picture

Paging Sergey Aleynikov... Sergey Aleynikov to the white courtesy phone.

Sat, 11/20/2010 - 13:00 | 743171 High Plains Drifter
High Plains Drifter's picture

Oh goody. Does that mean there will be crying in Cramerica as Jimbo and his trusty side kick Herb go down for the count this time around?

Sat, 11/20/2010 - 13:02 | 743176 Cleanclog
Cleanclog's picture

Lawyers will make some devaluing bucks and create some jobs!  That's the good news.

Very little if any jail time for the cheaters and crooks, and even less "recovery of goods" stolen.  Just a few fines.  Chump change already accounted for.

Sat, 11/20/2010 - 13:40 | 743218 laughing_swordfish
laughing_swordfish's picture


Sun, 11/21/2010 - 02:12 | 744009 Oh regional Indian
Oh regional Indian's picture

Bingo Clean.

I was one step removed from the "inside inside" group in the Silicon Valley through it's boom and bust.
This game is old, very old. I was "out" because I wasn't a qualified investor (read I did not like to play their games, which included a lot of Porn for some reason. All these grown men, Vulture Capitalists, captains of Industry were all hooked on cheap porn and prostitution, also a lot of white-poweder driven ego-maniacs).

Chump change indeed. So many settlements have happened that the ones who would really scream have long been silenced by the "settlement" teat.

Nope, this time, it's going to get ugly or stay face-painted, bo-toxic pretty for a little while longer.
But only a little while.


Sat, 11/20/2010 - 13:17 | 743189 Jake3463
Jake3463's picture

Minor characters get thrown under the bus and the beat goes on.

Sat, 11/20/2010 - 13:22 | 743195 carbon based unit
carbon based unit's picture

all accused parties settled with the SEC for undisclosed amounts and admitted no wrong-doing.  they also agreed not to engage in fraudulent behavior again.

Sat, 11/20/2010 - 13:25 | 743201 max2205
max2205's picture

500k fine at the most

Sat, 11/20/2010 - 13:34 | 743206 plocequ1
plocequ1's picture

Are Expert Networks About To Be Exposed As The Ringleader In The Biggest Insider Trading Bust In History? No!!  Now that was easy. You dont need a Harvard suit to figure that one out.  Have a nice day

Sat, 11/20/2010 - 13:30 | 743208 Jasper M
Jasper M's picture

While I must grant ZH props for being, as one poster says, "ahead of the curve", it is a little disingenuous to imply the result of a 3 year investigation is the result of a letter you wrote a year ago. I suspect that, between porn clips, the SEC gets their own ideas once and awhile. 

Speaking of which, this op must have been very well compartmentalized; with all those folks getting disciplined, any disaffected porn-suffer might have leaked the case. 

Sat, 11/20/2010 - 18:03 | 743454 digalert
digalert's picture

Haven't been around long, have you?

ZH has dragged, kicking and screaming, the SEC to the fraud.

Sat, 11/20/2010 - 18:45 | 743500 ImNotExposedToS...
ImNotExposedToSpeakAnySuchInformation's picture

SEC investigative years are measured in dog years; divide the number by seven to get the real value.

Sat, 11/20/2010 - 13:47 | 743222 papaswamp
papaswamp's picture

Guess there will be several overseas extended 'Thanksgiving Day' vacations for some.

Sat, 11/20/2010 - 13:53 | 743223 Escapeclaws
Escapeclaws's picture

What a joke. When will they go after the rating agencies? As these fraudsters like to say, "Whenever two or three entities gather in my name (Fraud), there I am in the midst of them." And indeed the rating agencies were and are in midst of all the financial fraud that brought down this economy, and elevated our masters.

Mon, 11/22/2010 - 08:56 | 745949 Bitch Tits
Bitch Tits's picture

When will they go after the accountants?

Mon, 11/22/2010 - 08:56 | 745950 Bitch Tits
Bitch Tits's picture

When will they go after the accountants?

Sat, 11/20/2010 - 13:50 | 743225 gdogus erectus
gdogus erectus's picture

This is bullshit.  Misdirection.  Throw a few banking buddies under the bus to satisfy the masses.  PD's don't like the competition for money from their Hedge Fund cousins anyway.

Tens of millions.  What a joke.  While the PDs front run treasuries.  When they include an investigation of the Fed, then I'll get excited.

Mon, 11/22/2010 - 14:03 | 746922 chopper read
chopper read's picture


Sat, 11/20/2010 - 13:50 | 743226 Rogerwilco
Rogerwilco's picture

You don't tug on Superman's cape
You don't spit into the wind
You don't pull the mask off the ol' Lone Ranger
And you don't...

Sat, 11/20/2010 - 19:07 | 743515 snowball777
snowball777's picture

...mess around with Slim.

Sat, 11/20/2010 - 13:52 | 743228 the grateful un...
the grateful unemployed's picture

Come on, they nailed Martha Stewart.

I just wonder if Cramer has some of these guys on his speed dial. That would be fun to watch. 

Sat, 11/20/2010 - 14:01 | 743241 Hook Line and S...
Hook Line and Sphincter's picture

Still the game player, never the casino itself.

More purposefully misallocated, misdirected energy.

Sat, 11/20/2010 - 14:39 | 743278 Bob
Bob's picture

Still the sandlot players, they haven't even gotten into the park or the big leaguers and owners. 

Sure makes the news, though. 

Or is it the funny papers?  Cynicism in America is approaching Soviet levels. 

Sat, 11/20/2010 - 14:29 | 743269 brodix
brodix's picture

Unfortunately this isn't a corruption of the system. This is the system. Law is an expression of power, not the basis for it. Things will only change when the pendulum starts swinging back the other direction. In the old days, the people in charge knew this, so they always kept something in reserve for when the bubble popped. Now they are throwing everything at it to keep it up. So if you really want real change, at whatever the cost, let them inflate to the moon. Local currencies will rise from the ashes. Just make sure they are publicly run and don't trust any bankers promising free toasters if you use their money.

Sun, 11/21/2010 - 06:31 | 744118 XPolemic
XPolemic's picture

It is said that if you kill one person they call you a murderer, but if you kill a million, they call you a conqueror. Likewise, if you steal $100, the government will throw you in jail, but if you steal a TRIIIIILION, you probably ARE the government.

What is taxation, if not theft? And you complain that men in expensive suits are stealing your money? Of course they are, they have a gun to your head.

In 1989, the people of Romania decided that they would rather be dead than live under the dictatorship any longer. So they protested, and they were shot, and they protested more, and they were shot more, and eventually, they won. But that is how extreme conditions must become before the average person will take any action. Sad, but true.

My advice is, live it up. It is the end of the Empire, it won't go away all at once, but piece by piece, so you may as well enjoy it until it's gone. Cheap gas, cheap ammo, cheap hookers, cheap porn, cheap burgers and cheap liquor. It's all good ... at least until it isn't.

Sat, 11/20/2010 - 15:01 | 743279 bankonzhongguo
bankonzhongguo's picture

Somehow the names Soros, Buffett and Blankfein won't be in the government's pleadings.

'$10s of millions in insider trading.' Please.  What a joke.

Just what exactly does the SEC enforcement division do everyday (for the last 10 years)?

The country is being run into the ground by the primary dealers through the Fed.  100+ trading days of pure upside via HFT and never a peep. Nice statistics, but not good enough for a warrant we guess.

To all those neutered G-men CPAs carrying heat and a badges; - How does it feel to buy into a career of 'Fidelity, Bravery and Integrity' and watch the real crooks short sell and foreclose on the Spirit of the Republic all the way to the bank and castrate Quantico and destroy careers in their spare time?

So nice to have Mr. Holder back in the saddle.  I missed all his Reno era warrant denials.  Good job keeping those agents and sources in the field holding their dicks so many years ago.  Obama and company appreciate more of the same.

Crooked crooks.



Mon, 11/22/2010 - 14:05 | 746932 chopper read
chopper read's picture


Sat, 11/20/2010 - 14:46 | 743283 10044
10044's picture

Damn, that's 60% of my PB's clients!! I heard steve cohen is opening a new shop downtown, is this why he's running for exit?

Sat, 11/20/2010 - 14:55 | 743292 ToNYC
ToNYC's picture


Whoa! Let's cut to the chase and get back to Source. The apple that the serpent offered to Eve and she shared with Adam was labeled, "FREE APPLE!"

Sat, 11/20/2010 - 19:15 | 743528 snowball777
snowball777's picture

Yeah, but God put the label on. What a kidder.

Sun, 11/21/2010 - 06:33 | 744106 ToNYC
ToNYC's picture


'Twas a matter of perception and attitude I might add, paraphrasing the notorious Mr. Gekko. They were born free as was the apple, but there was the Moral Authority  that accrued to the Planter, more important than the IP of the harvester.

Mon, 11/22/2010 - 14:07 | 746937 chopper read
chopper read's picture

(a presupposed single) god sure does have a sick sense of humor. 

Sat, 11/20/2010 - 14:59 | 743297 simone
simone's picture

ZH "have been right all along (once again)."  I myself was wrong once, when I thought I was wrong, but I was really right.

Sat, 11/20/2010 - 15:26 | 743304 random shots
random shots's picture

Hey SEC, (Yes we know you are reading this...)

Start with Bruce Berkowitz of Fairholme.

Two people running $17.1B in a concentrated portfolio (22 stocks) with no research team but hires "outside experts" to provide data (check morningstar).

Hides behind the "Warren Buffet" philosophy (whatever that means) but consistently beats the S&P 500 annually by a wide margin.



Sat, 11/20/2010 - 15:36 | 743323 buzzsaw99
buzzsaw99's picture

I find you all very, very, guilty. 8 months house arrest in your sprawling mansions and no lollipops for a week!

Sat, 11/20/2010 - 15:31 | 743325 philgramm
philgramm's picture

Sorry if this has already been posted.  Lead story on HuffPo this morning--Bernanke today asking the congress to "help" the economy by spending more of taxpayer's money.  He states the Fed can't "save" the economy by itself and that congress needs to do its part as well............Douche!!!



Sat, 11/20/2010 - 15:37 | 743333 buzzsaw99
buzzsaw99's picture

That is part of his strict "independent fed" credo. He can tell them what to do but they can't tell him jack squat.

Sat, 11/20/2010 - 15:51 | 743354 MyKillK
MyKillK's picture

He knows QE2 is failing already

Sat, 11/20/2010 - 15:35 | 743331 Rick Masters
Rick Masters's picture

If they arrested Bernanke, some on this board would say big whoop, "What about Obama?" Never satisfied, Always gloomy: ZHers. Or are the majority of posters really controlled by Walter Malthau and Jack Lemmon's ghosts? Let's see who is arrested then judge.

Sat, 11/20/2010 - 17:48 | 743433 philgramm
philgramm's picture

Most here on ZH have seen these threats of accountability before and we know how these things turn out.............No real accountability at all!!!!

Sat, 11/20/2010 - 15:42 | 743344 Captain Benny
Captain Benny's picture

SAC Capital and the wonderful Steve Cohen are going down in this one.  They might not pin it to Steve directly but they're going to pull the rug out from under SAC.

Sun, 11/21/2010 - 06:12 | 744107 ToNYC
ToNYC's picture


Yawn! Let me know when you get the IdeaPolice a mandate to race to the bottom of WhoKnew? bucket. I'll D/K that trade; it will bankrupt the house of the invisible hand..

Sat, 11/20/2010 - 15:44 | 743346 apberusdisvet
apberusdisvet's picture

Most of you are propbably not aware of all that went on during the S&L fiasco during the 80s; I was right in the middle of it connected as a advisor on real estate "investments" for a multi-billion S&L.  In my travels, I got to know Charles Keating, the Blankfein of his time.  While he essentially received minor punishment, the end result of all the fraud was that 100s actually did prison time, albeit mostly in Club Feds.

I constantly reflect that, in 25 short years, a single generation, our moral and ethical base has almost entirely been demolished.  Really, a shame.

Sun, 11/21/2010 - 06:23 | 744110 ToNYC
ToNYC's picture


They had no Faith to lose, and to watch them live was to know it. The Benjamins were going to save them, and the more the better. Lords of the Flies they were and thick as thieves they remain.

Sat, 11/20/2010 - 15:46 | 743348 Captain Benny
Captain Benny's picture

I forgot to mention that this is also tied to an SEC OIG investigation as the SEC initially failed to investigate numerous reports about the funds involved.  Finally the porn watchers got bored and decided to do something, I guess.  The problem is that the god damn commissioners will settle with a slap on the wrist.

I'm still happy that Steve Cohen is gonna get it handed to him this time.



Sat, 11/20/2010 - 15:49 | 743352 MyKillK
MyKillK's picture

What about the insider trading scandal that is the government lining up QE2 POMOs with the GM IPO?

Sat, 11/20/2010 - 16:17 | 743368 Insiderman
Insiderman's picture

No indictment for the generals at PIMCO?

Sat, 11/20/2010 - 16:30 | 743377 velobabe
velobabe's picture

very very interesting storyline. i am so cynical now as well. nobody cares whether these hedge funds folks get buster. most people in amerika are so dumbed down they don't know what the SEC even stands for (literally, initials). yeah, JAYwalk that people of US republic.

another great job, ZH senior staffer's

Sat, 11/20/2010 - 16:38 | 743382 bugs_
bugs_'s picture

I wonder who the Michael Milken is for this ring, you go high enough and there is always one guy.

Will Phani Kumar Saripella have to flee back to the subcontinent and hide out with Deep Shah?

Sat, 11/20/2010 - 16:38 | 743384 Milton Waddams
Milton Waddams's picture

"We obviously beg to differ, so have therefore declined the young gentleman's gracious offer to wear a wire and therefore ensnare you in their devious web."

At the very least this article will serve to foment some distrust among the players in this unsavory game.

Sat, 11/20/2010 - 16:51 | 743393 janchup
janchup's picture

Criminal charges please and no wrist slaps. 

Sat, 11/20/2010 - 17:45 | 743431 Djirk
Djirk's picture

I wonder if Bennie and the Jets are going to show up....PIMCO and the primary dealers?

Sat, 11/20/2010 - 17:58 | 743443 lolmaster
lolmaster's picture

ah TD, playing your role of useful idiot with the usual glee. do you really think you can win a seat at the table with these people? they will ship your a$$ to a gulag in a nanosecond. google Bezmenov for more on that.


for those who don't know the real story here let me show you the light:

Sat, 11/20/2010 - 18:03 | 743456 nohweh
nohweh's picture

How deep is the cesspit, and how high the mountain of shite that the USA has become?

Sat, 11/20/2010 - 18:19 | 743470 chinaguy
chinaguy's picture

"tens of millions of dollars"...blah, blah, blah. They nailed GS dead to rights earlier this year and all of they got was a slight "fine" equal to a few days trading profits. This is a non-event.

Sat, 11/20/2010 - 18:36 | 743492 nedwardkelly
nedwardkelly's picture

Wake me up when some meaningful number of people are charged more than a trivial amount.

Anyone want to wager that 1 or 2 people will be charged, then will settle for some trivial (relative to what has gone down) sum?

Sat, 11/20/2010 - 18:46 | 743501 Caviar Emptor
Caviar Emptor's picture

Like under Greenspan, Fed policy is to speculate and spend our way back to prosperity. How do you expect these Wall Street guys to win at the game without inside info? How do you think the whole rally got started in March 09? The whole inner circle was tipped off intentionally and they tipped off the next circle of hell. Else the whole thing would never even have gotten going at all. 

Sat, 11/20/2010 - 19:35 | 743540 plocequ1
plocequ1's picture

Nothing will happen. The rush to see what will happen to "Big bad Wall street " will result in more clicks to hero websites generating virtual funny money revenue . Its all good.

Sat, 11/20/2010 - 19:55 | 743552 bankonzhongguo
bankonzhongguo's picture

The fact that its in the press and the US attorney hasn't filed anything already speaks volumes of this DOA case.  3 years - hundreds of agents, millions of records and it all sits in some filthy AUSA bag-man-lawyer trying to figure who out who goes to temple on a regular basis and otherwise avoid prosecution. 

We are all waiting to wait on this one.  Any big corporations going to disappear?

Sat, 11/20/2010 - 20:46 | 743590 tradewithdave
tradewithdave's picture

As usual, there's no pulling the wool over on zero hedge, but how about this detail?  Is the John Kinnucan of Broadband Research who is highlighted in the WSJ article, the same Kinnucan we heard of way back in 2001.  It seems that he was the whistleblower who brought attention to unusually high levels of short selling for airlines impacted in the 9-11 terror attacks prior to the attacks.  His apparent unwillingness to wear a wire for the FBI is more coincidence than I can stand.  How many people email their clients after the FBI shows up at their office?   

For links on the story and reports dating back to September 19, 2001, click here: 

Dave Harrison


Sun, 11/21/2010 - 06:31 | 744117 ToNYC
ToNYC's picture


Dave must know that the trade was for Deutsche Bank's client. Does Seth know about this hole-in-one?

Sat, 11/20/2010 - 20:59 | 743605 Caviar Emptor
Caviar Emptor's picture

But...CNBS will run a special on American Greed! Take that!!

Sat, 11/20/2010 - 21:28 | 743610 Aristarchan
Aristarchan's picture

The fact that so many entities rely on "expert systems" to devise and execute trades actually brings up a real danger - or a saving grace - depending on your point of view. Expert systems that operate off native computers, whether they be cluster systems or mainframe style supercomputers, pretty much all use variants of UNIX, Linux, or something like the Windows HPC Server system. There are, reportedly, a few well-heeled firms using what they claim to be "proprietary" systems, although my guess would be they are heavily reworked Open systems. Whatever hardware system a firm uses, they pretty much all depend on very well-known operating systems that are very susceptible to viral attacks. The fairly recent attacks of the Stuxnet virus on the common combo of native computer systems married to industrial systems, shows the capability of programmers to develop and target cross-platform hardware systems with a sophisticated attack worm. The Conficker and the Mytob worm are very effective software platforms upon which to build attack cells that could easily be soft-wired to morph their core code application streams to hit whatever system environment they find themselves swimming in. It is only a matter of time, I feel, until a new viral variant is introduced into the world's financial computer networks, that because of their interconnectivity and almost "stand-alone" autonomy in executing trades, could prove devastating per its impact. Imagine a worm/viral cell that infects, establishes interlinked communication, fiddles around with "Monte Carlo" simulations and/or Mersenne Twisters, turns trades upside-down or misdirects them, then destroys itself and the affected databses. This is not science fiction, it is very possible. It could bring the world financial system to its knees. Maybe Williambanzai7 can take this and create some fuck-you art. For those malicious code collectors, think about lookup-tables and the problems inherant in averaging. For those who ride in black helicopters and wear jackboots and carry Belgian assault weapons, this piece is for recreation purposes only.

Sun, 11/21/2010 - 01:32 | 743970 docsdoc
docsdoc's picture

Perhaps the gifted Williambanzai7 can make a deck of econocriminal playing cards to assist the SEC...

Sun, 11/21/2010 - 02:38 | 744034 plocequ1
plocequ1's picture

Thank god for CSPAN. I would hate for these Dog and Pony shows to interfere with Regis and Kelly

Sun, 11/21/2010 - 02:46 | 744037 Boston Wealth
Boston Wealth's picture

Look at the amount of time from order placed until order execution... this is criminal action by the market makers and option specialists at BHI

anyone have any ideas what can be done or what exactly the rules say..


Sun, 11/21/2010 - 04:42 | 744071 Coldfire
Coldfire's picture

Over a year ago, Zero Hedge published an expose in three parts (two of them in the form of direct letters to Andrew Cuomo). 

Andrew Cuomo? I thought he was dead.

Mon, 11/22/2010 - 01:01 | 745584 No More Bubbles
No More Bubbles's picture

Just shut the fucking markets down and the problem is solved.  99% of "wealth" is fake!  The last one holding it wins!

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