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Schapiro Forces Perot Insider Trader To Refund $8.6 Million Profits, Still No Announcement On NYB Insider Trading Case
The SEC, which had its Dell-Perot insider trading case handed to them by various blogs, has forced the disgorgement of $8.6 million in profits from the perpetrator Reza Saleh.
The Securities and Exchange Commission today announced that a former
Perot family companies employee it charged with insider trading in
September has agreed to return all of his illicit profits — a total of
more than $8.6 million.Without admitting or denying the allegations in the SEC's complaint,
Saleh agreed to be permanently enjoined from violations of the
anti-fraud provisions of the Securities Exchange Act of 1934. Saleh
further agreed to an SEC administrative order barring him from future
association with any investment adviser.
And while this action is completely insufficient to warrant the continued abuse of taxpayer money by the SEC, and its ongoing worthless existence, we still demand that the SEC immediately initiate an investigation into the blatant insider trading, most likely facilitated by a person at the FDIC, in regard to the New York Community Bancorp taxpayer funded acquisition of recently defunct AmTrust Bank. We will keep reminding the Chairwoman of her grotesque failing as anything but a bureaucrat who managed to milk FINRA for so much more than she is worth ($3.3 million to be precise, and other insane pension benefits), and is currently merely a figurehead, whose sole responsibility is to let the Ken Lewises off the hook with nothing but a handslap.
Below we recreate the salient points from our post highlighting what is certainly insider trading in the stock of NYB ahead of a material announcement.
Mary Schapiro Must Immediately Investigate The FDIC's
Confidential Information Leak In Another Blatant Insider Trading Case,
Then Resign
The degree of insider trading in this market is getting ridiculous. And the strangest thing is those who are executing on blatantly obvious material, non-public insider information, are no longer concerned the least bit about getting caught as they realize that the "mighty" SEC will do nothing against them, courtesy of the example the SEC has set by finding absolutely nobody "responsible" (except, of course, the regulator's own future employers who thus get immunity from prosecution) for the greatest market heist in history in which over $5 trillion has been transferred from the middle class to the Wall Street oligarchy (future providers of paychecks for SEC staffers).
Today's grotesque example of the SEC's futility to act as even a modest deterrent to insider trading activity: New York Community Bancorp (which, just so happens, is a $602 million recipient of TLGP debt), whose stock surged in the final minutes of trading for reasons (then) unknown. As reader QevolveQ pointed out at 5:30 pm, the activity in both the stock and the calls of the company was many standard deviations away from average and raised major red flags. Those questions were quickly put to rest when it became known at 6:33 pm that NYB would in fact receive FDIC subsidies to acquire newly failed AmTrust Bank in a transaction that would be "immediately accretive to earnings." And how wouldn't it be:
Under the terms of the agreement, the Community Bank did not acquire any
of AmTrust Bank’s non-performing loans serviced by AmTrust Bank or any
other real estate owned; construction, land, or development loans;
private-label securities, or mortgage servicing rights, nor did it
acquire any of the assets or assume any of the obligations of the
holding company.
No, those would conveniently be funded by Ms. Bair herself. The cost to the FDIC, and US taxpayers, to make NYB a richer enterprise: $2 billion. This is value that will go straight to the bank's bottom line. As a result of this middle-class subsidy it was a certainty that its shares would spike.
The smoking gun here comes straight from a quick observation of NYB's intraday P/V chart: the jump at 3:24pm on statistically significant volume is a clear signal that someone was fully aware of the soon to be announced transaction:
Furthermore, as QeQ highlights, "8,933 of the Dec 12 calls traded vs. 2,244 OI, finishing +300% on the day." A very solid return for a few hours of trading. The block trades are visible below: one set of 2,500 Dec $12 calls bought at $0.20, followed promptly by two more 2,500 blocks around $0.25. With the stock poised to open much higher than its closing price, someone is sure to make a killing.
It is practically certain that the NYB stock and option transactions came courtesy of a insider tip. And as NYB is both a ward of the state, courtesy of its TLGP umbilical cord, and as the bank would soon become $2 billion richer as a result of some more middle class-to-Wall Street fund flows, it is very likely that the FDIC itself is the source of such leak. We truly hope that one of D.C.'s most ineffective and useless females (if grossly, grossly overpaid for her "work" in 2008) will analyze whether the agency headed by another such female has been responsible for yet more illegal insider trading activity. That the government is only capable of promoting unpunished criminal activity would not surprise anyone at this point. And as this will be one of those cases when everything is handed to the SEC on a silver platter, we don't doubt that some minor scapegoat will be put away to make it seem like the most worthless organization in the world earns its $1 billion annual budget fair and square. What is chilling is the complete disdain that insider traders now flaunt when it comes to fear of retribution by the "regulators." And when Ms. Mary "$3.3 Million" Schapiro is done catching any and all masterminds behind this dastardly deed, we would all be very grateful if she could leave her keys, her chauffeur, and her masseuse as she packs her banker box full of Wall Street indulgences on the way out of public office once and for all - Ms. Schapiro, the public does not want you betraying its trust any longer. Now please go work for Goldman Sachs where your continued betrayal of U.S. interests will be welcome and compensated much better than the meager $3.3 million you made at Finra. The sooner you get into a job that requires efforts more consummate with your diminished capacity, the sooner you can continue counting the $5-$25 million in cash payouts you slurped up from FINRA's defined benefit plans.
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Well, if Dell or Perot ran an FDIC-insured bank, yeah, Saleh probably walks with his money. There is a central theme here. It is the banksters. We must end the Federal Reserve and reform the Treasury. The revolving door must stop.
Hey Barry!
In just under one year, you have completely blown your political capital and haven't "changed" one thing. Wall Street and the banking oligarchy have you under complete control and are stringing you along like a puppet. Your base has plainly spoken that they absolutely think you have failed relative to the financial crisis (you have failed, they are correct) and the worthless SEC and its Wall Street tentacle, Mary Schapiro, is just one example. The fact that you have renominated Bernanke, whose policies and unwillingness to regulate having lead us into this mess and whose policies are more of the same but on steroids, is beyond insanity. You've got one of the principle architects of our financial catastrophe, Larry Summers, as your chief economic adviser and a total and complete loser as Treasury Secretary.
Even your party incumbents can see the light and are jumping off the sinking ship like the rats that they are. Not that the Repubs are better, and they aren't, but they through the American people are going to deal you a major blow in the upcoming elections because you have phucked up beyond belief and are making the financial crisis even worse.
I would like to say that I voted for you hoping there was sincerity in your "change" and "transparency" message and I am a phucking idiot for falling for that shit. If you don't get rid of Bernanke, Summers, Geithner, Schapiro and the Goldman Sachs team that is running (stealing from, actually) the country, we will end up on the trash heap of former great civilizations.
Start listening to Volcker and his ilk or you will soon be hearing calls for your impeachment.
Tyler, I think you should stop pulling your punches and really let her have it. ;)
Damn the US is screwed.
Did this actually happen..someone placed a $20 out of the money put for $1.7 million on Bear Stearns with a week before expiration and made $200 million on collapse of BS? If that actually happened I can only guess that the SEC missed it because they were high-fiving themselves for nailing Martha Stewart for her $4,000 illegal profit from inside information given to her. What a country!
Maybe some smart reader can tell me how this situation is different from those where people disgorge profits and go to jail, too?
Why do they only act when the perp is someone of Middle East descent? Telling.
I am Chumbawamba.
TD has become like...gold. He just refuses to go away.
For what it's worth, it's almost certain that "various blogs" didn't tip the SEC about the options activity in Perot. What did tip the SEC? The odds are it was the surveillance units of the options exchanges themselves. The options exchanges watch activity and report unusual activity to the SEC. Given the facts disclosed in this case, those facts obviously seem unusual enough to trip alarms all over the place. Judging from the speed with which the options exchanges have acted in the past in similar cases, that seems like exactly what happened here.
Take a look at http://www.sec.gov/litigation/litreleases/2006/lr19778.htm. This incident was well before "various blogs" were on the scene, and it certainly shows the options exchanges and the SEC moving very quickly in an insider trading case.
I'm no fan of the SEC's abilities (M-a-d-o-f-f) but options insider trading is one area in which the industry and the SEC seem to work well together.
So who is going to jail for this insider trading?
Same ones as always nowadays... no one.
Not a single perp walk... and they could not catch Madoff as he turned himself in!
America and the market are a total crock of $#!t. Am liquidating positions and going into ag and ag. This massive scale fruad will end badly.
GOLD BITCHES!!!
SILVER MOTHERFUCKERS!!!
you want to see who would go to jail?..try it...your ass or any of the sucker class would take the beeline express to incarceration city...
the whole country must be on snooze...well at least we know there's 2 set of books as it pertains to the law...I only thought that applied to the accounting profession.........
I don't know if you're married or indulge in female companionship, but berating a female will not entice said same into bed with you, unless of course she is into S&M.
Next time treat her like a man and present the issue like it was her idea the whole time.
As the old saying goes, you can lead a female to the bedroom, but you aren't going to engage in an under the sheets romp unless you whisper sweet nothings in her ear.
Your problem is that you pants'ed her last time leaving a deep emotional scar which can only be assuaged with expensive jewelry, flowers, and an all expense paid two week trip to Aruba, without you of course.
Try robbing $57 from the corner liquor store . Then pay it back. You'll be out the 57 bucks and still get a small cell with Bubba for a few years.
White collar crime is the way to go.
How's that old "justice is blind" thing workin' for y'all ??
I've not forgotten either Tyler, thanks for the follow up on NYB...QeQ