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SEC Files Lawsuit Claiming Insider Trading in Perot Takeover
Amazing how quick the SEC can move when it is presented with visual aids. And we didn't even have to part ways with a single calculator, stapler, abacus or toothpick.
And here's the guy: Reza Saleh
Washington, D.C., Sept. 23, 2009 — The Securities and
Exchange Commission today charged Richardson, Texas resident Reza Saleh
with insider trading around the public announcement of Dell Inc.'s
tender offer for Perot Systems earlier this week.
The SEC alleges that Saleh made increasingly large purchases of
Perot Systems call options contracts based on material, non-public
information that he learned in the course of his employment with, or
duties for, two Perot-related private companies and Perot Systems.
Immediately following the tender offer announcement on Monday,
September 21, Saleh sold all of the call option contracts in the
accounts and reaped approximately $8.6 million in illicit profits.
Later that same morning, SEC staff with assistance from the Options
Regulatory Surveillance Authority identified Saleh as a suspicious
trader. Soon after being contacted by SEC staff, Saleh acknowledged to
a Perot Systems director that he knew about the impending transaction
when he traded.
"The overwhelming evidence in this case allowed the SEC to move
quickly against the trader before he could spend the huge profits from
his illegal trading," said Rose Romero, Director of the SEC's Fort
Worth Regional Office. "The Commission is seeking a court order to
freeze Saleh's assets."
According to the SEC's complaint, filed in federal court in Dallas,
Saleh purchased 9,332 Perot Systems call option contracts through two
brokerage accounts between Sept. 4 and Sept. 18, 2009. The call option
contracts were set to expire in October 2009 and January 2010. Saleh
sold all of the call options following the announcement as Perot
Systems' stock price immediately increased by approximately 65 percent.
The SEC's complaint charges that Selah violated the anti-fraud
provisions of the Securities Exchange Act of 1934, including specific
provisions that prohibit trading while in possession of material
nonpublic information about tender offers. In addition to seeking an
emergency asset freeze, the SEC has sought a preliminary injunction and
a final judgment permanently Selah from future violations of the
relevant provisions of the federal securities laws and ordering him to
pay financial penalties and disgorgement of ill-gotten gains with
prejudgment interest.
The SEC's complaint also names Amir Saleh of Richardson, Texas, as a
relief defendant, in order to recover trading profits he received as a
co-account holder on one of Reza Saleh's brokerage accounts.
The Commission appreciates the assistance of the Options Regulatory
Surveillance Authority. The SEC's investigation is continuing.
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It's about damn time
Well done TD. This alone justifies the existence of this blog.
1 scumball down, 100,000+ more to go.
Now they have Barney and Andy back on duty,
UP TO THE MINUTE NEWS; WELLCARE MEDICARE FRAUD INVESTIGATION…
http://www.enterprisecorruption.com/
I think the SEC should provide ZH with a commission off the settlement (because you know it will be a settlement with no criminal charges). After all...ZH seems to be doing all the work of exposing the problem. The SEC only seems to take action after the cat is well out of the bag.
I think it's only fair...I suggest 10% after tax net.
WOW, un-freakin-believable that they actually do their job only when they are called out on it.
This only happened because he's a nobody. If this was any other wall streeter (like Hanky or other former NY Fed Chief), they'd just resign and that's that.
Bingo.
Was his namo.
Like the Mafia (like?), you must get approval in advance or be a made man.
still not the droid you're looking for
I was thinking this while reading the article. I knew someone would respond this way. I love this site. Reading it while listening to a U2 bootleg is a great night. The fact ZH was all over this and then the SEC responds is a classic. However, the fact that the SEC fires both barrels at a guy who made $8.6 mil and has no ammo whatsoever for the real criminals looting billions (trillions) is laughable.
That's what you get for not paying bribe money to the SEC. What would impress me the most is sending all GS exc in jail.
Great job ZH
Thanks.
If the cops could only learn how to identify a crime while it is commissioned without the aid and assistance of others.
Bravo
These are things some of us have been shouting about for 15 years on stoopid Yahoo message boards.
When cockroaches see light I guess its less easier to ignore. Or something.
I guess it's easier for the SEC (read safer) to go after individuals. Or maybe this insider trading just screamed too loudly to be ignored. Of course, this lone scum-man didn't account for all of the activity that set off ZH alarm bells. I suspect this guy lost the draw for straw man duties.
Fall man on the first day of fall.
Amen
TD, we are going to get you a sheriff's badge like the texas rangers.
Kudos
Miles and miles to go
There goes their budget. They'll have to pull the plug on the other stuff.
How to go TD and ZH! This is great.
Congratulations on a job very, very well done!
I will be fascinated to hear the penalties
HE stole $8.6 Million
If he was Bank of America that means he would be fined $8000 for this trangression
Of course he would pay the fine while not admitting fault
Too bad Mr Saleh is not a financial oligarch, it would be much easier from here.
No way !
Snaps to ZH.
i would have done teh same thing. hopefully a lot more cleverly.
So the SEC can find its BUTT, when you stand it in front of a mirror and point a light at it FOR THEM?
How much am I paying for this public service?
Reza may want to ping Google and get his identifying information down right quick
http://www.google.com/search?q=Reza+Saleh+texas&hl=en&client=firefox-a&r...
LOL!
Reza Saleh (972) 783-8839 1602 Kindred Ln,Richardson, TX 75080
make sure you call Reza and ask him how someone smart enough to know one could profit from such info via call options can be so dumb as to execute in such a sloppy manner.
ROFLMAO!
TD any chance while your pointing these things out to the SEC you could get them to look into who forced open the way out of the money option series in Bear Sterns way back when ?
To Anonymous;
Citigroup was the Designated Primary Market maker on the CBOE for BSC. A client of their's requested and received permission from the CBOE. Some speculate that GS and JPM organ executives were short BS, Lehman and Merril
Johnny Options
Dear Johnny Options,
I came across this. Do not know the author. Does this jive with what you know?
the original link is broken. this is the website to which it was posted.
http://www.sandersresearch.com/index.php?option=com_content&task=view&id...
Bear Stearns Buy-Out... 100% Fraud
By John Olagues Truth in Options
Apr/24/2008
This article is about how Bear Stearns stock was artificially collapsed so that illegal insider traders would make billions and J.P. Morgan would be paid $55 billion of US tax payer money to shore up themselves and buy Bear Stearns at bankruptsy prices.
Massive buying of puts and shorting stock in Bear Stearns
On March 10, 2008, the closing price of Bear Stearns was 70. The stock had traded at 70 eight weeks earlier. On or prior to March 10, 2008 requests were made to the options exchanges to open new April series of puts with exercise prices of 20, and 22.5, and a new March series with an exercise price of 25.
Their requests were accommodated and new series were opened for trading March 11, 2008. Since there was very little subsequent trading in the call with exercise prices of 20, 22.5 or 25, it is certain that the requests were made with the intentions of buying substantial amounts of the puts. There was, in fact, massive volumes of puts purchased in those series which opened on March 11, 2008. For example: between March 11-14 inclusive, there were 20,000 contracts traded in the April 20s, 3700 contracts traded in the April 22.5s, and 8000 contracts traded in the April 25s. In the March 25s, there were 79,000 contracts traded between March 11-14, 2008.
Question: Why did the options exchanges not open the far out of the money puts for trading the first time that Bear Stearns stock hit 70, when the April and March options had far more time to expiration? Certainly if the requesters were legitimate hedgers or speculators, their buying the March and April puts with 2 and 3 months to expiration was more reasonable.
Answer: The insiders were not ready to collapse the stock and did not request the exchanges to open the new series when Bear Stearns first hit 70.
Second Request and Accommodation
On or prior to March 13, 2008, an additional request was made of the options exchanges to open more March and April put series with very low exercise prices.
These new March put options would have just five days of trading to expiration. The exchanges accommodated their requests, knowing that the intentions of the requesters were to buy puts. They indeed bought massive amounts of puts. For example the March 20 puts traded nearly 50,000 contracts (i.e. contracts to sell 5 million shares at 20). The March 15s traded 9600, the March 10s traded 13,000 and the March 5s traded 6300 all on March 14 (the first day of trading of the new March series).
The introduction of those far-out-of-the-money put series in the April and March months immediately before the crash provided a vehicle whereby extreme leverage was available to the insiders. In other words if an insider had $100,000 and he knew that Morgan would buy Bear Stearns at 2, he could make 5-10 times more on the $100,000 by buying the newly introduced March puts. This is so because the soon to expire far out-of-the-money puts were far cheaper than the July or October out-of-the-money puts. And that is why the illegal inside traders requested the exchanges to introduce the far out-of-the-moneys just days before the crash.
But this scenario has serious implications. This means that the deal was already arranged on March 10 or before. That contradicts the scenario that is promoted by SEC Chairman Cox, Fed Boss Bernanke, Bear CEO Schwartz, Jamie Dimon of J.P. Morgan (who sits on the board of directors for the New York Federal Reserve Bank) and others that false rumors undermined the confidence in Bear Stearns making the company crash, notwithstanding their adequate liquiduty days before.
I would say that the deal was arranged months before but the final terms and times were not determined until maybe March 7-8, 2008.
On March 14, 2008, the April 17.5s, the 15s, the 12.5s and the 10s traded 15,000 contracts combined. Each put gives the right to sell 100 shares. So for example, these 15,000 April puts gave the purchaser(s) the right to sell 1.5 million shares at prices between 10 and 17.5. Those purchasers expected to make profits on 1.5 million shares because they knew the deal was coming at $2.00.
That is the only plausible explanation for anyone to buy puts with five days of life remaining with strike prices far below the maket price.
So there were requests, during the period of March 10-13, to the exchanges to open the March and April series for buying massive amounts of extremely out-of-the-money puts, which were accommodated by the options exchanges. Did the Exchanges aid and abet the insider trading scheme?
We do not able to have a strong opinion on that idea.
Media statements of adequate liquidity.
However, Reuters, on March 10, 2008 was citing Bear Stearns sources that there was no liquidity crisis and that there was no truth to the speculation of liquidity problems.
And none other than the Chairman of the Securities and Exchange Commission on March 11, 2008 was stating that "we have a good deal of comfort with the capital cushion that these firms have".
We even had the "mad" Jim Cramer proclaiming on March 11, 2008 that all is well with Bear Stearns and that the viewers should hold on to their Bear Stearns. And on March 12, 2008, Alan Schwartz CEO of Bear Stearns was telling David Faber of CNBC that there was no problem with liquidity and that "We don't see any pressure on our liquidity, let alone a liquidity crisis".
The fact that the requests were made on March 10 or earlier that those new series be opened and those requests were accomodated together wth the subsequent massive open positions in those newly opened series is conclusive proof that there were some who knew about the collapse in advance, while Reuters, Cox, Schwartz and Cramer were telling the public that there was no liquidity problem.
This was no case of a sudden developement on the 13 or 14th, where things changed dramatically making it such that they needed a bail-out immediately. The collape was anticipated and prepared for, even while the CEO of Bear Stearns and the SEC Chairman of the SEC were making claims of stability.
What was the reason that Cramer, Cox and Schwartz were all promoting Bear Stearns immediately before its collapse. That will be speculated upon for years to come.
Cramer has admitted that "truth" was not his friend and that he manipulated stocks to influence investors behavior. Was this one of his acts?
But no apologies from Cramer as he claims now that he was refering to keeping money in Bear Stearns Bank not in Bear Stears stock.
Proof of Insider Trading:
To prove the case of illegal insider trading, all the Feds have to do is ask a few questions of the persons who bought puts on Bear Stearns or shorted stock during the week before March 17, 2008 and before.
All the records are easily available. If they bought puts or shorted stock, just ask them why. What information did they have access to which the CEO and the SEC did not have? Where did they get the info? Why aren't Cramer and Cox, Dimon, Bernanke, Geithner, Paulson, Faber and Schwartz subject to a bit of prosecutorial pressure to get to the bottom of this.
Maybe the buyers of puts and short sellers of stock just didn't believe Reuters, Cox, Schwartz, Cramer and Faber and went massively short anyway, buying puts that required a 70% drop in a weeK. Maybe they had better information than Schwartz or Cox. If they did, then that's a felony, with the profits made subject to forfeiture.
April 4, 2008 Congressional Hearings on the Bear Stearns Bail-out.
I watched both sessions and drew the following conclusions:
In the first session there were the following witnesses.
Bernanke of the Federal Reserve Board, Cox from the SEC, Geithner representing the New York Reserve Bank and an incidental player Mr. Steel from the Treasury. The only Senators that seem to be willing to attack these bankers were Bunning, Tester, Menedez and Reed.
All the rest were useless and very respectful.
Absurdities
All witnesses did their best to keep their stories consistent but they did slip up a bit. They all agree that the bail-out was necessary without any proof that it was. They all agreed that what caused the cash liquidity to dry up within one day was the rumor mongers. Apparently it is claimed that some people have the ability to start false rumors about Bear Stearns's and other banks liquidity, which then starts a "run on the bank" . These rumor mongers allegedly were able to influence companies like Goldman Sachs to terminate doing business with Bear Stearns, notwithstanding that Goldman et al. believed that Bear Stearns balance sheet was in good shape. (Goldman between March 11-14 warned their average customers that Bear Stearns stock was "hard to borrow" for shorting due to the fact that other customers had used up all of the stock avaiable for borrowing for short sales) .
That idea that rumors caused a "run on the bank" at Bear Stearns is 100% riduculous. Perhaps that's the reason why every witness were so guarded and hesitant and looked so strained in answering questions.
Loans to J.P. Morgan total $55 billion from FED
The Private New York FED lent $25 billion to Bear Stearns (described as the primary facility by James Dimon) and another $30 billion to J.P. Morgan (described as the secondary facility by James Dimon). So the bail-out cost was $55 billion not the $30 billion that is promoted. This was revealed at the second session of the Senate hearings in a James Dimon responce to a question from Senator Reed. Who gets the $55 billion? J.P. Morgan received the money on a loan pleadging Bear Stearns assets valued at $55 billion. $29 billion is non-recourse to Morgan.
Effectively the FED received collateral appraised by Bear Stearns at $55 billion for a loan to J.P. Morgan of $55 billion. That's a loan to value of 100%. If the value of the secondary facility of $30 billion ($29 billion of which is non recourse) is worth only $15 billion when all is said and done, then J.P. Morgan has to pay back only $1 billion of the $30 billion received and keeps the $14 billion the the Fed loses. If the $25 billion primary facility is worth only $15 billion when all is said and done, J.P. Morgan has to pay $10 billion of the $25 billion received. If J.P Morgan can not pay, then the Fed loses the $10 billion.
If after all is said and done, the $25 billion primary assets or the $30 billion secondary assets are sold for more that $25 billion or the $30 billion respectively, the difference goes to J.P. No matter how you cut it, J.P. Morgan wins If the $55 billion assets turn out to be worth only $20 billion when all is said and done, J.P. Morgan owes $1 billion on the $30 billion and the difference between $25 billion and the value received on the primary facility.
The best the FED can do is get their money back with interest and the worse they can do is lose about $25 -$40 billion. The FED would have been far better to just buy the assets at Bear's and J.P.Morgan's valuation.
The question arises:
Why didn't the FED just make the $55 billiom loan to Bear Stearns directly?
The FED received Bear Stearns assets valued by Bear Stearns as its only collateral for the 100% loan. I am sure that Bear Stearns would have guaranteed the full $55 billion and would have advanced more collateral and accepted a 90% loan to value. Everything would have been just fine for Bear Stearns and the FED would have had a better deal. But the Bear Stearns stock would have gone up and all short stock sellers and all put buyers would have massive losses instead of massive gains.
The bail-out is a great deal for J.P. Morgan, the illegal insider short sellers got a great deal.
Bear Stearns stock holders and employees got a very bad deal and the sellers of puts sustained large losses.
This shows, in my view, that J.P. Morgan and the FED were in collusion with the short sellers and put buyers.
John Olagues [Published March 23, 2008, link]
Well done ZH! You are now the "High Plains Drifter" of the markets getting justice the old fashioned way.
+1
Google is so cool
in 2 minute I can have a Reza -thon
Reza works at TPG
thanks linked in
http://www.linkedin.com/pub/reza-saleh/5/a73/60
He went to Harvard - surely another bright mark on the Business School code of ethics
TPG provides 'value add' for all involved, including its consulants I assume
http://www.tpg.com/about/index.html
TPG is a leading global private investment firm with approximately $45 billion of capital under management across a family of funds. Since the firm's founding in 1992, our investment philosophy has been to create value by investing in change - change created by industry trends, economic cycles or specific company circumstances. Our tradition of providing unique investment insight and value-added operating capabilities to companies undergoing change, as well as our comfort in dealing with complexity and distressed companies, differentiates us from many traditional private investment firms.
Thankfully the traders at Goldman can work through dark pools to post their insider trades... lest they get caught up in such scandals that nab amateurs like Mr. Saleh
Goldman Sachs Group Inc. and Baker Botts LLP advised Perot on the transaction, while Morgan Stanley and Vinson & Elkins LLP helped Dell.
haha. I wonder if TPG is trying to recoup their 7 billion investment in WAMU....
thank you, zero. you put it in their face.....and enough of us are reading you now that it is.....a major embarrassment. sad to say, that's the deciding factor now (how public is this thing and how embarrassing is it if we look the other way)......
sad. sad. sad.
but, thank you for putting this in large print with charts for them........
Damn, TD.
You're making it rather difficult to be an Uber Criminal these days.
Love the greed.....he sold ALL the contracts all at once.
Someone send this dude an " ARREST ME" t-shirt.
Yes, me thinks, my comrade in cyper crime was a tad greedy.
$8.6 Mil in one month in filthy lucre, now that's my kind of illicit profits.
Enough to make even the Vapire Squid sit up and take notice.
Ah yes, $8.6 Mil for the Vampire Squid..., still...., just a drop in the ole chum bucket.
Looks like we super villians will need to spread those call options a little thinner over a longer period of time to fly under TD's radar.
That guy was an Uber Dumbass.
No doubt, just buy a handful of contracts and be happy,avarice is overrated and just pisses off the greedy masters who run the game.
Thanks guys/girls. Sincerely. Things are bubbling, and in a healthy way for a change.
2 thumbs up for the SEC for catching a criminal.
2 trillion thumbs down for the SEC for letting the hundreds of thousands of other criminals walk free.
apparently "Richardson, Texas resident Reza Saleh" is not too big to fail
"One minute was enough, Tyler said, a person had to work hard for it, but a minute of perfection was worth the effort. A moment was the most you could ever expect from perfection." Chuck Palahniuk, Fight Club, Chapter 3
This is it folks. This blog and others like it is what is left of journalism. As I let that sink in, I sort take a big gulp of air and go, "Oh sh!t."
No one is at the helm...
There is no helm.
well done!
I despair a lot, MsCreant, but ZH gives me much hope for the "journalism" we all long for these days. Plus, with Tyler and Marla writing in their exquisite ways, it's even entertaining.
Ciao bella!
friendly reminder to those insiders who feel the need to do the "right thing" or are simply sick of watching the bad guys phuck everybody over, remember that the way to dismantle a corrupt machine is for one good cog to step out.
i would suggest sending an email to tips at zerohedge dot com where you will get better results than if sending to the sec.
Sounds like they got a small fish...
... if GS had been the one trading before the news, well.. we know how this would have gone...
Great job ZH, BUT, what surprises me is that none of the Wall Street crime syndicate (GS et. al.) was involved, and what most certainly DOES NOT surprise me is that fact that they moved because none of their criminal GS masters were involved. I mean why such a quick action on this one and NONE WHATSOEVER on other BLATANT manipulations like AIG, Lehman, etc.? If anything, you can't blame me for being cynical.
Edit: Not to take anything away from ZH, but perhaps in this case the SEC did exactly what it is supposed to do - its raison d'etre - to protect the monopoly of GS and it's cronies over all all looting and pillaging in the US capital markets. I mean GS might have directly ordered this hit via SEC to make an example out of anybody who dares to tread on Goldman territory. This is the best I can come up with to explain the COMPLETE INACTION over AIG and such a lightning fast response on this one.
smells very much like selective enforcement.
the smell to me over the past 25 yrs or so is very much like selective nonenforcement.
too true deadhead.
I would like to add that I also emailed the SEC email address that was given by another reader. I am really appreciative for Zero Hedge using their knowledge and talents to do what is ethical and right. I think we should all become activists with the knowledge ZH provides us, we are the ones that need to email, call, and write. Thanks ZH for being a Bright Light in a very dark environment.
magnificently said!
I am most confident that the ZH piece is what lead to this action.
I'm also with GG in suggesting that the SEC get off their duffs and start perp walking people out of GS.....if the SEC really wants any of us to believe that they have any teeth, someone from GS must do the walk.
It would not be selective enforcement either, Ms. Schapiro; ZH and others have provided the SEC with plenty of examples.
I will close with my usual in the hopes that someone in the WH is checking this blog and I am confident that they are: President Obama, Mary Schapiro is making you look like a fool when it comes to reforming the rats out of cheat street. Please get rid of her....now.
Next stop: Goldman Sachs and their PALM antics.
Upgrade PALM, sell secondary offering to public, Spread NOKIA rumor from some obscure analyst before offering(total BS.) PUMP and DUMP after offering and rumor dissipates.
Right on TD!
Sorry, but I don't see what all the cheering is about. The other side of the trade was almost certainly a market maker (who else sells out of the money calls when volatility is so low?). Tell me again why ZH readers should care about options market makers occasionally getting screwed by insider trading when options market makers are constantly screwing everyone else?
And hey, what do you know, the specialist for PER on PHLX is Group One. The same Group One that settled with the SEC in March for screwing customers:
http://www.sec.gov/litigation/admin/2009/34-59503.pdf
I'm with you mate.
Then maybe it was the market maker who complained and not necessarily ZH that brought this to the SEC's attention?
Just sayin'....
2 rights always make a right.
put another shrimp on the barbie!
zero hedge is the charcoal for the grilling of these sea roaches and hopefully soon, calamari!
SEC, I applaud you. This is a big step in the right direction.
This small fish will be fried for all to see, to prove how the SEC is all after catching the bad guys, when in fact the real criminals (a la GS) stand protected.
They always seem to find the call options buyers. I guess if you can't afford to buy the stock outright then you are too "ghetto" to play.
I also wrote the FBI, explained the case and told them we expect the SEC to do nothing :)
A coordinated effort by independent members of this community will do a lot.
Actual article before editing:
"Later that same morning, SEC staff, who had finished their coffee break, and turned back on their computers to wait for instructions from Zero Hedge, with assistance from the Options Regulatory Surveillance Authority (who also monitor Zero Hedge), identified Saleh as a "suspicious trader." Soon after being contacted by SEC staff, Saleh acknowledged to a Perot Systems director that he knew about the impending transaction when he traded, and fell to his knees in fear for his life. Mr. Saleh also confessed to being the "27th member" of the terrorist team responsible for the 9/11 World Trade Center disaster, which investigators are pursuing.
"The overwhelming evidence in this case, developed as a result of Zero Hedge's involvement allowed the otherwise somnolent SEC staff to rouse themselves and move quickly against the trader before he could spend the huge profits from his illegal trading on further purchases of AIG stock," said Rose Romero, Director of the SEC's Fort Worth Regional Office For Lethargic Affairs and Lackadaisical Enforcement, adding that the SEC staff "was grateful for the opportunity to blow the whistle on a marginal player in order to distract irate taxpayers from the dismal job they were doing with the real criminals on Wall Street." She stated, "the Commission is seeking a court order to freeze, or at least render frosty and icy cold, Saleh's assets."
"Thank God for Zero Hedge, " added Ms. Romero, who declined to say whether or not she and Tyler Durden were recently seen at trendy Fort Worth restaurant.
geez ... stop the stroke-fest already. this was reported elsewhere also. I mean, c'mon, it's not like the options activity was not noticeable.
I have officially upgraded the SEC from:
"Why Do You Even Exist?" to "Next to F*cking Worthless"
Moving in the right direction guys!
Yes, saw them officially raised from "Sell" to "Don't Buy!"
Still trying to decide on which video to use for their PR campaign though...
http://www.youtube.com/watch?v=uur4IENiEUY
or
http://www.youtube.com/watch?v=_E7V8GEChjk
awesome!! I wonder if the SEC actually read the ZH post about it... lol In any case great job for pointing it out ZH and good job SEC for actually doing something for once
ZH, you win a .999 fine silver serving tray for offering the goods. Think the SEC styrofoam coffee cups will look nice there? +1
I am amazed at the posters here. Look at the guy's name,and you will find out that this is one of the best opportunities presented to the sec to have a pat on the back for. The guy is a MUSLIM,a very easy target these days.As the say goes,kill ten birds with one stone(lol)...
I sure am glad the SEC got on this case quick to protect the interest of those option specialists - oops, I meant to say the investing public - who had sold short all those Perot systems calls!
Doesn't Goldman make that in like 5 minutes everyday doing the same thing? I feel sorry for the guy - someone doesn't like him very much and wouldn't let him join the club.
Great job Tyler Durden and team. When I saw the newsflash today, I thought of your article from yesterday. Thanks for the follow up here today.
Here ye, hear ye...Menckenian vestiges live again in this world resurrected by Zero Hedge.
Good job Tyler Durden and team
TD and ZH are Inglorious Bastards.
power to the people man! let's take this to the streets!
Jesus. Another false flag. Go into Goldman with an audit team and look at every trade in Perot. Question every employee regarding these transactions. You will find their prop/personal accounts have a fantastic record on Perot profitability. Instead, they've charged some little peon. Pathetic.
Yup, somebody sold calls that will never pay.
I wish they would stop being crooks long enough for me to catch my breath. I am starting to get behind in my readings from this website. I have started taking notes because I can't remember who is after whom and for what.
Word is October is going to be even better.
I too emailed the sec... And also asked how my buddy Angelo Mozila is doing with his 140 million ...
Good Job
Wow! Awesome! Someone call CNBC, I'm sure they'll be ALL OVER This!
Why can't the SEC fund itself through insider trading? A dozen or so deals like the DELL/PER would get them enough dough to triple their getaways to lavish sites so that they can discuss how to frame Marthas.
"Moronic anonymous bloggers" with "zero intelligence" causing a ruckus in an otherwise perfectly normal world. Leave journalism to CNBC. Charlie Cabrera and Michelle Gasparino will be none too pleased.
I've only had one interaction with the SEC, but I have to say I found them very responsive. I reported that Lenny Dykstra's options selection service was using fraudulent and misleading advertising (zero losing trades... wow, good job Nails), and from what they told me off the record, it seems like they would have lowered the boom on him had he not have been publicly discredited and filed for bankruptcy before they could take action. At this point, what's the point of going after such a pathetic loser? :-)
Madoff seems to have taught them a bit of a lesson. If industry professionals are actually willing to rat out their own now, they listen.
Let's hold our own hearings here on ZH...lol
Yay! The SEC caught someone who fraudulently made $8 million!
Too bad about that Madoff guy though...
+100
Not to discredit ZH and side with the SEC, but is there any evidence that prior to the initial ZH post the SEC was not already investigating this on their own? I mean the initial post was the day the deal was announced. It seems highly possible, that as incompetent as the SEC may be, they checked option activity without having to be told by ZH.
If I go down to my local WAL-MART and swipe a DVD and get caught, I would have no recourse but to take the deal, admit guilt, pay about a months wages in fines and fees and spend 10 days in the local jail. The judge always gives the ten days, and really its not that unfair.
I should be punished enough to convince me to pay for my future purchases.
The court dosent just make me "disgorge" (love that term!)the DVD, and pay a 10 dollar fine and be on my way without admitting guilt.
Contrast these blatant multi million dollar heists; They only get caught if the SEC if pointed to them, and then they only have to give back the ill-gotten gains, pay what is to them a 1.00 fine, and not even have to say "Sorry I did it".
The guy has probably done plenty of insider trading, I say this because he was so obvious and blatant. Shoplifters get like that too, and get caught eventually.
Wouldnt the SEC perhaps want to go over a few records and charts and see if the guy has been doing this all along?
NO. Unless its Martha Stewart, they act like they just want the sordid affair put to rest, with no nasty criminal proceedings.
Question for the board; Could the DA in Texas or wherever the crime occured, bring criminal charges against the crook, SEC or no SEC?? Any law majors out there? TIA!
I love this blog, thank God for the internet. The MSM is worse than useless,IMO.
I might be in a totally different camp here, but I think here's an instance where the SEC could win some points with a little more "follow through".
Saleh was easy pickings for the SEC, and perhaps TD was instrumental in bringing up the subject. Perhaps the broker on the other side of the transaction was more than willing to help, too.
It seems to me, though, there was even more call option activity that can be explained through Saleh-- to which the SEC needs to do some "deeper digging". What they find from a more extensive investigation might demonstrate their resolve a little better.
As it stands, the SEC found a small fish in a small pond-- and caught it quickly. Kudos.
Now go investigate all the broker prop desks to see if that insider information didn't get disseminated further.
Will most likely be settled with a fraction of the money made... Suckers
Amazing!
Jeez, this guy sucks at insider trading, couldn't he even round up a maiden aunt in Biloxi to call the deal in for him?
THE NEW YORK TIMES IS CREDITING ZH WITH SOLVING THE CRIME!!
NICE WORK!!!!!!!
Employee Tied to Perot Systems Is Charged With Insider Trading
September 23, 2009, 7:26 pm
The Securities and Exchange Commission on Wednesday charged two men with running an $8.6 million insider-trading scheme connected to Dell’s $3.9 billion agreement to buy Perot Systems.
One of the individuals charged, Reza Saleh, 53, is an employee of a firm affiliated with Perot Systems and is the one accused of masterminding the scheme. It revolved around the purchase of call options, which give the holder the right to buy shares at a preset price. (Read the lawsuit after the jump.
In its lawsuit, the S.E.C. claims that Mr. Saleh, as someone who has done work for Perot Systems and related companies for several years, became aware of talks between Dell and Perot Systems long before the deal was announced on Monday. A conversation with a Perot Systems director around Sept. 8 confirmed the news, according to the lawsuit.
Mr. Saleh then bought at least 9,332 Perot Systems call options between Sept. 4 and Sept. 18 through two accounts at TD Ameritrade. After the deal was announced on Monday (leading to a 65 percent pop in Perot Systems shares), Mr. Saleh then sold all of the options, reaping about $8.6 million in paper profits.
He withdrew $5,000 from one of the accounts, according to the S.E.C., but was blocked from withdrawing $55,000 more because by then his accounts had been frozen at the behest of the regulator.
Another individual, Amir Saleh, was also charged because one of the accounts was in his name.
The lawsuit by the S.E.C. follows reports of a spike in options trading volumes following the companies’ deal announcement on Monday. Zero Hedge, in particular, highlighted a big spike in purchases of Perot Systems call options last week.