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Gasparino On The Implications Of The Latest Insider Trading Spectacle
Speaking on Fox Business, Charlie Gasparino notes that the full wrath of the government in the latest insider trading spat may end up hurting as many as a dozen hedge funds. We already know three of them. The question of whether the big kahuna will also be implicated will be resolved another day. Additionally, now that the implications of the Galleon fund scandal are finally coming back with a vengeance, and everyone is once again talking about insider trading, which is a crime when one person does it, but is perfectly condoned when all the biggest hedge funds are engaged, below we present Gasparino's conversation with a securities fraud expert on just how far-reaching the implications of today's gauntlet may be. On the other hand, how not one TBTF bank has been (so far) prosecuted for being an integral part of all these illegal activities is beyond us.
As readers will recall, as part of the FrontPoint filing, there were at least two investment banks named in the allegation. Here is what our thoughts were on the matter:
Once again, courtesy of the SEC, we
know that selling 2 million shares of HGSI ended up being an almost
inhuman task, with a lot of it having to be internalized by "Investment
Bank 2" (undisclosed). As an aside, as the bank's trader knew all too
well FrontPoint was selling to it a massive block of stock
at a below market price, presumably in a dark pool, after seeing the
HGSI press release the next day, he should have been immediately
cautious and reported the FrontPoint sale to compliance:
the unwillingness to do so was a breach of fiduciary responsibility to
Investment Bank 2's shareholders, and was merely an attempt to curry
favor with FrontPoint, with his bonus, and shareholders, eating the losses. The
point here is that HGSI trading was rather illiquid in the open market,
and that large block trades would have happened in dark pools. Even so,
it should be very easy to confirm or deny when and under what
circumstances SAC also decided to dump their nearly 2 million shares.
This will be another topic to be pursued soon, but in the meantime, here is the disclosure as part of Gasparino's earlier conversation:
On the Justice Department’s insider trading probes:
“Sources in Washington and New York are saying there is essentially a war on hedge funds from the Justice Department. The Justice Department wants to set a major example here in the trillion dollar hedge fund industry and their plan is to take down as many as a dozen hedge funds that are involved in this investigation. Shut them down or at least severely alter their business practices. They believe hedge funds have had an unfair advantage in the markets.”
On the SEC’s involvement:
“What’s interesting is the SEC seems to be taking a backseat. SEC generally investigates insider trading but the Justice Department has taken the lead on this. It is a goal of the Justice Department to fundamentally alter the hedge fund business; how they make money, how they gain information, even if it’s not technically illegal at this point, they are looking to change practices.”
On his sources:
“We are getting this from sources who have dealt with the Justice Department; these are attorneys, these are hedge fund managers, who are right in the middle of this thing.”
On whether the SEC is looking to broaden the definition of insider trading:
“I haven’t heard that from them. There’s also some uncertainty about how far the government is pushing. There is some legitimate reason to worry whether the government is over extending their idea of insider trading. I think what they stumbled across is a very useful witness and they threatened him. The prosecutor often uses people as a means rather than an end, ultimately you have got to decide what is insider trading and I don’t think US Attorneys are going to dare expand the definition very far.”
On whether this most recent FBI raid on hedge funds should be of concern to investors:
“It is a big matter. It’s a nationwide investigation. The FBI is spread across the country interviewing. We do know as a result of the Galleon probe some 14 people have plead guilty already. All of those 14 will be pumped by the SEC and US Attorneys to give information and leads into other cases and all of them have an incentive to give information for leniency.”
On whether this SEC probe is a “fishing expedition”:
“I think we have some knowledge that they have been taping telephones. Which requires a court order. That’s the real new development in terms of the procedures used. Classically insider trading investigations you more or less stumbled over a conspiracy. Over the weekend they were finding FBI agents appearing on their front steps and demanding they wear a wire.”
On what the phone tapes will do to help the investigation:
“I think that’s going to give you credible proof. There are going to be issues about privacy, and it’s very expensive. You can’t do this to an unlimited degree.”
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Hedge Hunt, bitchez
Whatever it is, the order came from High Command for the sacrifices to begin. Eric and Barry both need to start hitting some 3-pointers. Game clock ticking away. They way behind.
Bullshit bullshit bullshit bullshit.
Talk about bread and circuses.
The public's madder than hell and won't take it anymore and what the fuck do they get? A bunch of second fucking string B rated players tossed into the pyre of the public eye, offered up for the wrath of immolation in the town square of public scrutiny whilst the Modern Mongol Hoardes roam the streets loose, pilfering the Department of Treasure at the behest of the those sworn to protect such in exchange for free speech contributions.
Fucking Dog and Pony Bullshit Show.
Distractions men! Diversions! Sleight of Problem. Look Like We're Responsive, for Shit's Sakes.
What about arresting everyone suspected, siezing all their assets, and threatening them with life in prison unless they cop a plea?
Isn't that what they did to Tommy Chong for selling a bong on the internet?
Front row seats please.
Free popcorn all around.
Charlie "The Gasbag" is not my hero, but he ain't no shrinking violet.
>how not one TBTF bank has been (so far) prosecuted for being an integral part of all these illegal activities is beyond us.
You wonder? Geithner talks to the Empty Suit who talks to Holder and voila. It couldn't be simpler.
Holder IS the "Empty Suit"
Timmay's the Wanker...
Wanker + Empty Suit = TBTF Off Scott Free...
what do you call it when your government does it?
A week day.
Tricky Dick said it best in just 4 seconds !
http://www.youtube.com/watch?v=ejvyDn1TPr8
"I don’t think US Attorneys are going to dare expand the definition very far.”
What tha fuck does that mean except that they'd get dead.
America..." A Bank with a military "
as i sit here watching our government pump AMZN to the moon -- in the face of 43 million "shoppers" now eating courtesy of foodstamps -- this "insider trading raid" appears to be nothing more than the latest episode in a very sad, sad spectacle......
It has all the hallmarks of a dictatorship in the making. Non-objective law that no one can define in advance, much less know whether they are breaking the law, check. Subjective notions that depend on psychology, check. Legal or illegal depending on who does it, or when, or the mood of the prosecution, check. Aggressive politician/prosecutor needs to fry a big fish, check.
The losers in this game are easy to spot. The winners are, umm, ....
Someone needs to investigate Paulson and the timing of Alan Greenspan consulting his firm (curiously at the apogee of the housing market)
Greenspan never knew there was a problem my fuckin' ass.
...I know. I'll keep dreaming.
I have often thought the very same thing for years now.
" On the other hand, how not one TBTF bank has been (so far) prosecuted for being an integral part of all these illegal activities is beyond us."
Damn right. Banks are off scot free
nullem crimen sine lege
"the unwillingness to do so was a breach of fiduciary responsibility to Investment Bank 2's shareholders"
This is the same error people made with regard to MBS. The shareholders are part of the Ponzi scheme. This is the point: there are not different firms or different players. They are all ONE Ponzi scheme and all the players are players in this ONE scheme.
Thus, you have to read correctly the idea that they "don't want to expand the definition of insider trading." No. They don't want to reveal that they are dealing with one Ponzi scheme, which involves not only TBTF banks, but also the United States Government.
If they brought in these players, there would certainly be a revolution, and for precisely the same reason there was a revolution in France in 1789:
the government is bankrupt.
Stay tuned. This is all unraveling as we watch.
Transports pretty much ignoring all the insider trading scandals, Goldman Sachs problems, imploding countries in Europe.
Trucks and rails are still necessary to move the iPads, Lululemon outfits, designer shoes, sporting goods, 3D LCD TV's, and whatever else is in huge demand by the "resilient consumer" these days.
Yawn
Are you suggesting that people buy transportation companies then? Are you personally invested in transportation companies? Trying to suss out what the fuck your point is here.
The Coon is unimpressed -- (scratchez ass, picks nose....)
SEC taking a back seat?
I understand a new video "Debbie does Dallas is out".
That would be Mary does Wall Street "doggie style".
An uglier thought...
Or more disturbing mental video image...
Could not be had...
Sheila Bair-back Does Her Uncle
Uncle Greenspan?
As I re-read this article I got to thinking of dark pools.
What emotion does the word "dark pool" invoke?
blackwater, dark pools, shadow banking...sometimes I feel like I'm living in a Tom Clancy novel.
Can't they name this crap something more upbeat? Like unicorn pools, leprechaun banking, rainbow water...why must it have such sinister connotations?
I mean even Cerberus. It's like what do you do tell a chick when you meet her?
"I work at a mythical three headed dog that guards the gates of hell. I specialize in trading in darkpools. And what do you do for a living?"
"On a going forward basis, I'd like to initiate multiple, simultaneous, J.I.T. discovery processes into what S.O.P. would achieve the team-based goal of my sausage synergizing with your peach, preferably in a fluid fashion that dynamically responds to rapidly changing conditions. Let's schedule some face-time, please contact my assistant via Skype."
have the Feds allowed The Banks to pay a dividend yet?
12 Wrist Slaps Comin
11 Pimpers Pumping...
10 year bonds plunging...
9 Loyds a leapin'
Eight Maiden Lanes a milking
Seven Black Swans swimming
Six Sovereigns Sinking
Five Goldman insider trading indictments.
Four Morgan Perps
3 French be-headings...
two twin towers
And a Bernake skewered on a pear tree!
LOL... Talk about dark pools. This string smells of consipracy:) LOLOLOL
Six Greece's griping...
Hopefully they bust that squirrelly little Anthony Scaramucci that is on CNBC all the time hawking his book and books. After he attempted to gig President Barry during his Wall Street townhall meeting he may be on the top ten to get at the SEC.
unfortunately due to this kind of witch hunt, people who are legitimately "too good at making money" will also be victimized by useless and needless government intervention.
Name 1 (only one) who is legitimate and how you know for certain they are legitimate.
I believe the assumption is that the entire system is fraudulent and honest hard working people cannot remain honest in a fraudulent system and succeed.
Yeah...I call this as nothing more than ben blowing frank and frank blowing ben.
Nothing will happen wihout REAL perp walks and arrests being made inside Goldman Headquarters, the FED and the TREASURY. Otherwise its just bullshit.
+1
Wake me when Loyd Blankfiend takes a swan dive off any floor # 40 through 100.
It's like watching an NFL team call a penalty against itself for excessive celebration during a 45 - 0 rout.
From original WSJ article: "Illegal insider trading is rampant and may even be on the rise."
With the Fed using every tool possible to inflate stock prices and with their and other government interventions causing so much market instability, there certainly is a lot of profit to be made trading on secret information. You bet it's rampant, and you bet it's on the rise. It can't possibly be properly regulated in our current system, but the reason politicians like it is because they can trade on inside information legally. Obviously the solution is to abolish the SEC and to decriminalize all insider trading.
Corporations would create their own bylaws, the markets would self-regulate, and those trades which are perceived to be unfair or harmful to investors would be prohibited by those bylaws. Markets are self-regulating and will regulate this problem much better than the SEC. Currently, it's rampant and current laws allow sneaky inside traders and politicians to get away with it.
Do some research. Embrace freedom, embrace capitalism - not this statist, ponzi, corrupt system.
Read more about decriminalizing insider trading:http://online.wsj.com/article/SB10001424052748704224004574489324091790350.html
To find out more about the Imminent Collapse of the Global Economy, watch the video “Police State, FEMA Camps, America under Attack!!” at (http://youtu.be/X10xq_jvF2Q)
And you thought groping by TSA was bad, wait until you're sent to a concentration camp!! God Bless America!!!
by Anonymous
the america i knew is gone---i dont even want to leave the house anymore--people dont even talk to each other anymore------only to get what they need and? then run back home-----its sickening-----really
They might want to look into the NY Fed and oh by the way the Treasury Dept sending out news alerts every Sunday evening or for that matter every evening on what to expect in the way of economic calendar news. This has been going on for months using Reuters or Asociated Press.
ZH is a great website...the best contra indicator on the planet. The more this website shouts bear the more the market goes up.
While I appreciate ZH, the writers utterly fail to put anything -- and I mean anything -- into proper context. The site fails to construct a mosaic such that although there are certainly concerns, it misses anything that even hints of a positive.
SO I PUT IT TO ZH: is there anything in this world that you find positive? And equitable valuation? Or are you just jaded because you personally failed long ago and blame Wall Street for it. And speaking of the recent insider trading scandal, I'm sure that Tyler can you its readers his personal experience.
Rah
Yep. I find you positively misplaced and irrelevant.
My personal understanding is ZH's job is not a balanced reporting, but reporting things others don't report.
You can easily construct you own balanced "channel" by alternating posts from ZH and CNBC.
Add in a little Jersey Shore for Real News
"Or are you just jaded because you personally failed long ago and blame Wall Street for it."
Monoki - right on -blame Tyler or other "troublesome individuals"; its the same logic that has brought so much trouble on suspending PM... look at the cause and it seems to me you and people like you are part of the problem - tyler is bringing some light to the darkness.
Here you go Mono......
This is a positive right?
http://www.defense.gov/news/newsarticle.aspx?id=61797
By Elaine Wilson
American Forces Press Service
WASHINGTON, Nov. 22, 2010 – Defense Department officials announced
the services' recruiting and retention numbers for the first month of
the new fiscal year, as well as a change in the way they report
recruiting numbers to the public.
The services already are off to a good start, with both active and
reserve components meeting or exceeding their year-to-date accession
goals, Curtis Gilroy, the Pentagon's accession policy director, said.
Gilroy attributes the services' recruiting success, in part, to the
economy but also cites other significant factors, such as patriotism.
"Illegal" is just code for "out of political favor." All sorts of things are perfectly "legal" when you have the right connections or position.
Examples:
If you print federal reserve notes, you go to jail. If Bernanke does it, it's his job.
If you grow marijuana in your house, you go to jail. If the CIA does it to fund their black ops, it's perfectly fine.
If you collude with insiders, you get a hefty fine or go to jail. If Goldman Sachs colludes with politicians, no problemo.
If you fail to hand over your property to the IRS, you get a heavy fine or jail time. If Geithner does it, it's a slap on the wrist.
There's one set of rules for prey, another set of rules for the predator. Just as all fiat currency eventually goes to zero, all government eventually devolves to this.
Don't have high expectation for 'justice' you will ultimately be disappointed.
When they start prosecuting thousands of Wall Street financial sector scumbags for the ongoing multi-trillion dollar scam still in progress, wake me up... I think its' going to be a long sleep.
Failed as in Too Big Too Fail and needing a Tax Payer Bailout?
They won't be happy until there are zero hedges
To maximize the "wealth effect", some rules may be ignored, laws abrogated, rights rescinded, and transgressions forgiven.
Everything is proceeding as planned.
is there not enough yellow tape to surround ALL OF LOWER MANHATTAN?
get it at walmart fer christ saks'
Kudos to Patrick Byrne at Deep Capture for insisting insider trading and naked short selling were conspiracies.
"dark pools" meets "light of day" equals "deep shit".
basic arithmetic
"On the other hand, how not one TBTF bank has been (so far) prosecuted for being an integral part of all these illegal activities is beyond us."
Yes. This hedge fund sweep is a side show. Unless there is a main event (massive RICO prosecutions of the TBTFs), or it leads to a main event, it will remain a sideshow.
The Justice Department wants to set a major example here in the trillion dollar hedge fund industry... .
Industries produce something. Two guys trading the same unicorn back and forth for successively higher or lower prices don't. Neither do twenty thousand.