The power of federal prosecutors is on gruesome display in the latest issue of Fortune, which chronicles the story of former Citigroup commodities trader Craig Gile who found himself jailed for allegedly cooking the books at his trading desk. The strongest evidence against him is that he seems to have corrected some reports that overstated the value of his desk's assets, which prosecutors construed as evidence of knowledge that his desk was engaged in chicanery. First Citigroup flipped on him and then his immediate supervisor. With the odds stacked against him, Gile (whose name is unfortunately pronounced like "guile") pleaded guilty and was sentenced to a year in federal prison.
The prosecutors seem to have been motivated more by the urge to set an example for others than by the gravity of Gile's alleged wrong-doing. Here's how Fortune describes the situation:
[W]hen it comes to Wall Street, in the absence of clear rules and a lack of close regulatory supervision, the thinking among prosecutors and judges seems to be that the aggressive pursuit of a select few will be a deterrent to thousands of other traders who might be similarly tempted. Jonathan Streeter, the assistant U.S. attorney who handled the case, said he couldn't comment. However, an attorney who formerly worked in the Southern District says there are very stringent rules in the office about how far a prosecutor can bend to show leniency to a defendant. "Once that train gets on that track," says Chauvin, "it is almost impossible to derail."Trader, father, veteran, convict [Fortune]
Posted by guest , Jun 02, 2008 11:40AM
it is a bit damning when one pleads guilty if he is not, circumstances notwithstanding.
Posted by guest , Jun 02, 2008 11:50AM
yet another innocent little angel pleading guilty to a federal felony. oh, the humanity!
Posted by guest , Jun 02, 2008 11:50AM
He pleaded guilty to a crime. He was a trader who cheated. What happened to his boss? Or...as is the case from time to time....did Gile intimidate his boss?
Never, never, never trust traders who mark their own book. Ever. Period. And I'm a trader.
Posted by guest , Jun 02, 2008 11:53AM
sounds like a young prosecutor wanted to make a name for himself....or had nothing else on his plate that would make the front page.
Posted by guest , Jun 02, 2008 12:05PM
So he admits doing it in order to make his budget and please his boss? What sort of a defense is 'everyone was doing it, and anyway my motives were pure'?
Posted by merkin capital partners , Jun 02, 2008 12:06PM
his boss got 15 mos
Posted by lift all the offers , Jun 02, 2008 12:28PM
@11:50, amen brother.
Posted by Finnegan , Jun 02, 2008 12:37PM
Who did Guile fellate to get such a puff piece?
I like how the move to Florida (asset protection anyone?) is described as Craig badly "neededing a change," and a chance to chill with the retiring parents and have a clean slate.
Meanwhile in prison, he could not find time to answer the 130 he received. Time shortgage I guess.
He received a year, got out three months early (with a one month stay in a halfway house, which he bitches about). Despite this, will still land on his feet, and contemplating a hedge fund.
One can imagine that what he did-intentional, unintentional- is nothing much out of the ordinary of what can go on, but he pled guilty. Whose fault is that?
I am still trying to find the really sad part of this story. Gruesome display of Federal power my ass.
Posted by guest , Jun 02, 2008 12:45PM
For those commenting who haven't read the the Fortune article-- read it. Gile got screwed. Anyone who thinks prosecutors are always right needs only to look at the travesty of the Duke Lacrosse case.
Posted by guest , Jun 02, 2008 1:03PM
Anyone who thinks that the US federal government (under the bush adminstration) can't fuck with your life at their behest is not paying attention!! Duke Lacrosse case is the tip of the iceberg.
If you disagree with this statment ask yourself how many of the 86,000 people that have been interrogated or the 26,000 that have been subject to some sort of extradionary rendition all without recourse to legal aid, have been charged and or but on trail. Some of those people are American citizens.
Hey, at least he didn't get the death penalty. Of course of 100 others who were guilty (and later found to be innocent - after they were put to death) and sentenced to die in this country were not so lucky - think prosecuters are all about justice think again.
ps - totally agree with the dude who states never trust a trader who marks up his/her book.
Posted by guest , Jun 02, 2008 1:15PM
"If there is seen to be a crime, there must be seen to be a punishment. If the person being punished is actually guilty, that's just serendipity." - Terry Pratchett
Posted by guest , Jun 02, 2008 1:56PM
If you look deep enough, we're all guilty of something. All the time. Decisions to prosecute these types of crimes are mostly political
Posted by guest , Jun 02, 2008 2:06PM
His boss got 15 months for flipping on Guile. Ironically, the government asked Guile to flip on his boss and he wouldn't do it. It's all right there in the article.
Posted by guest , Jun 02, 2008 2:24PM
If the FEDS had any interest in fixing the problem instead of setting an example, blame would have been put on Citi to increase controls and reporting. Sure Gile was in front of this, but he was just a cog in the machine.
This article fails to draw attention to the fact that the inflated numbers benefited Citi as well. Jailing Giles will change no ones actions and just makes it easier for Corps to place blame on employees for oversites that the Corps themselves could have much easily corrected. Why would they though when the traders will now take the fall?
-chad
Posted by guest , Jun 03, 2008 4:57AM
The article is a joke. It relies entirely on Gile's word for his claims of innocence (I guess that's what he claims). By the article's own account, Gile either lied when he pled guilty (those proceedings are under oath) or he was actually guilty. His judge friend doesn't help either. He admits that the government had more than enough evidence to convict Gile. Why was Gile getting those fake quotes from a trader in NJ if he was so innocent?
And the fact that everyone does it is no defense. If the practice is widespread, all the more reason for the government to send a message that when they catch it, they will prosecute it. That's how law enforcement works. Its called deterrence.
Posted by guest , Jun 03, 2008 7:43AM
I get it that we're supposed to "stretch" to challenge us. But the stretch is done in the budget and forecasts not on reported financial statements.
Giles should have known better. But he paid his dues, taken a fall and now its time to pick himself up.
Posted by guest , Jun 06, 2008 7:40AM
All for a lousy $20 million? According to that standard, Hank Greenberg should do approximately 800 years with no possibility of parole. Five people were convicted because of him, and he rolls merrily along.
Sadistic f*cking creeps.
Posted by guest , Jun 06, 2008 7:40AM
All for a lousy $20 million? According to that standard, Hank Greenberg should do approximately 800 years with no possibility of parole. Five people were convicted because of him, and he rolls merrily along.
Sadistic f*cking creeps.
Posted by guest , Jun 06, 2008 7:41AM
All for a lousy $20 million? According to that standard, Hank Greenberg should do approximately 800 years with no possibility of parole. Five people were convicted because of him, and he rolls merrily along.
Sadistic f*cking creeps.
Posted by guest , Jun 06, 2008 7:56AM
Sorry for the multiple posts. There is no way to tell if your post has been completed.
Posted by guest , Jun 06, 2008 9:27AM
It seems his sentence didn't work as a deterrent. As he's sentenced and going off to Club Fed, the Street undergoes massive mis-marking of mortgage-backed portfolios. I guess they didn't get the message.
Posted by guest , Jun 19, 2008 10:11PM
Read the Fortune article and Gile's letters from prison before you jump to conclusion: http://money.cnn.com/2008/06/02/news/newsmakers/morris_gile_letters.fortune/index.htm?postversion=2008060216
Posted by guest , Jul 30, 2008 2:43PM
I would like to know how many of these people making negative comments actually know anything about the stock market and how commodities are set. How many people have lived in connecticut and know how this probablly haunted him and his family every place they went. I find it funny how people think they are above all this. The Law can come down on anyone anytime for very little reasons. Lets see your tax returns for example. I'm sure one could find something not quite right there.
consider perhaps this man just actually tried to do the right thing by making the corrections. How about that???!!!
Posted by guest , Aug 18, 2008 6:15PM
Totally agree with the last comment regarding how people should reserve their holier than thou attitude and make sure they understand pricing and the fact that everything is not black and white on Wall Street. You can be damned if you do and damned if you don't. And all the time you are trying to keep your job while navigating the lack of clearly defined rules. Then you are at the mercy of some prosecutor like Eliot Spitzer trying to make a name for himself.