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Just find me one honest person on Wall Street. Just one. I dare you.
“One of America’s wealthiest men was among six hedge fund managers and corporate executives arrested Friday in a hedge fund insider trading case that authorities say generated more than $25 million in illegal profits and was a wake-up call for Wall Street….Rajaratnam — born in Sri Lanka and a graduate of University of Pennsylvania’s Wharton School of Business — has been described as a savvy manager of billions of dollars in technology and health care hedge funds at Galleon, which he started in 1996. The firm is based in New York City with offices in California, China, Taiwan and India. He lives in New York…
According to another criminal complaint in the case, Danielle Chiesi (who worked for New Castle, the equity hedge fund group of Bear Stearns Asset Management Inc) and Rajaratnam were heard on a government wiretap of a Sept. 26, 2008, phone conversation discussing whether Chiesi’s friend Moffat should move from IBM to a different technology company to aid the scheme.
“Put him in some company where we can trade well,” Rajaratnam was quoted in the court papers as saying. The complaint said Chiesi replied: “I know, I know. I’m thinking that too. Or just keep him at IBM, you know, because this guy is giving me more information. … I’d like to keep him at IBM right now because that’s a very powerful place for him. For us, too.”
According to the court papers, Rajaratnam replied: “Only if he becomes CEO.”
…U.S. Attorney Preet Bharara told a news conference it was the largest hedge fund case ever prosecuted and marked the first use of court-authorized wiretaps to capture conversations by suspects in an insider trading case.
He said the case should cause financial professionals considering insider trades in the future to wonder whether law enforcement is listening.
“Greed is not good,” Bharara said. “This case should be a wake-up call for Wall Street.”
I’d love to see a financial industry populated by extremely dull, unimaginative people. We’d all sleep a lot better at night.
(photo courtesy of Tony Cyphert)
8 Comments
Wall Street is wide awake and stealing us blind.
It’s the Enforcers who need to wake up.
And then, of course, there is this bit of sunshine today as well:
“Bloomberg reports that the Securities Exchange Commission has named Adam Storch, a former Goldman exec, as its enforcement division’s first chief operating officer. Storch is actually just 29 years old and previously worked in Goldman’s business intelligence unit.
http://www.huffingtonpost.com/2009/10/16/adam-storch-sec-hires-exg_n_323526.html
Hooo-wee — BIG improvement, right? Another ‘smartest young guy in the room’ who’se going to ride herd on all the other ‘smartest young guys in the room’.
That someone like Adam Storch,a 29 year old Goldman Wall Streeter,should get this type of position does not bode well for what to expect out of Securites Exchange Commission enforcement being he has a long career exposure of post SEC employment/income potential to consider and keep in mind. He undoubtedly understands where the big money is and that surely is not at or in the employ of SEC as Wall Street beat cop.
Adam Storch surely knows where government service can be bartered into big money,big career paths and longterm big bonus payouts. Anyone suggesting this sort of consideration will not shade the quality of his SEC output really needs to take WashingtonDC Revolving Door Private/Public Career Paths 101.
Would it not be better to bait this trap from the other end and force Wall Street players to fund SEC bonus plan that in turn is geared to quality and quanity of oversight,enforcement and zealous rotten apple picking out which for a good,lifetimes worth of work would and could pay out big multi million dollar bonus packages for government oversight done with honesty,integrity and dedication to protecting the American people?
We know Wall Street sets the table now to encourage the fast players and sharp gamers to play all the angles and cover both sides of the big bets all based on win I win/lose I lose nothing boiler room premise which produced Autumn 2008 shakedown of American taxpayers via WashingtonDC.
It is time to capture a sizeable portion of Wall Street winnings and place it in reward/bonus pool to encourage a regulatory and enforcement culture of savvy oversight and enforcement to take hold at institutions such as SEC that would put in place long term,adversarial prone SEC careerists who do not come from Goldman and Wall Street. Who are generously rewarded for ferreting out the crooks and grifters found on Wall Street.
Every Wall Street trade,transaction and big money deal should be required to pay into this bonus pool that would make being a Elliot Ness type a worthwhile career move and keep the Frank Nitti Wall Streeter types on the sharp edge of truth and consequences.
One can hope this Adam Storch may very well do OK and put in a good performance but would it not be better if he was not coming off a Goldman gig? Instead was coming up a vigorous SEC career path system where really savvy and capable enforcement and ferreting out conduct presented big bonus payouts too?
Not to suggest good,rule enforcing Americans are not at SEC soley based on being good,rule enforcing Americans but as Autumn 2008 Debacle or the Bernie Madoff Crime suggest the motivations may not be up to the tasks of sniffing out the crooks and getting the handcuffs out and on. We know that under different circumstances Wall Street players should have been running into some serious oversight and enforcement headwinds five years ago. If this had been so perhaps Autumn 2008 Wall Street Debacle or the Madoff Crime could have been kept much smaller or indeed avoided.
Another Goldman Sachs exec to watch over Wall Street, huh?
Hank Paulson claims he knew nothing of the financial bubble that the sub-prime market was creating. They allowed Bear Stearns and another competitor of Goldman to go under and SAVED AIG! Why? Because AIG owed Goldman billions in insurance claims against the bad loans they were making.
Now we have another Goldman alum to be a Wall Street “watchdog”? What ever happened to conflict of interest? Fox guarding the hen house!
I wrote about Mr. Paulson almost a year ago. He’s been a liar from the start:
http://seminal.firedoglake.com/diary/1065
What I don’t get is why we’re such pansies? CEO murdered by mob of sacked Indian workers
You’d think with all the nutters in this country there’d be some angry mob outside the homes of these people 24/7 terrorizing them, or have we just not reached the point of having lost all faith in our political institutions yet?
How about this one. And I thought Barney Frank was a Progressive!
http://www.financialfuturesandequitymarketanalysis.com/.
I am so disheartened when we cannot even rely on him!
And Bill Moyers, when he hosted Marcy Kaptur last week, told us that we’d ALMOST(!) paid for the 1984 savings and loan ripoff, 2019!!
As Howard Zinn pointed out in his book, “Social History of the United States”, big money has always been in charge.
Wall Streets wake up call is.
HEH! The American people are so dumb we don’t have anything to worry about.