ARS Mess Goes Criminal

For the first time, we have substantial criminal allegations in the auction rate securities mess. Federal prosecutors in Brooklyn have filed criminal fraud charges against two former Credit Suisse brokers, Julian Tzolov and Eric Butler. The SEC has filed a civil suit against the duo.
Ordinarily, we’re skeptical about the use of criminal charges to regulate Wall Street. But these allegation, if true, make out a good case for criminal fraud. According to the FBI, the duo sold securities back by mortgages to investors who were told they were
purchasing relatively low-risk securities backed by student loans. The motive allegedly higher commissions that the brokers earned from the mortgage back securities. In other words, this goes far beyond giving clients misleading information about the risks involved in auction rate securities. These guys were telling clients they were buying one thing while selling them another altogether.

Former Brokers Indicted on Auction-Rate Securities Fraud Charges
[Law Blog]

The Hunt For The Stripper At The Heart Of Goldman!

This morning Wall Street was smirking over the possibility that an intern at Goldman Sachs had resorted to working as a stripper because her position at the firm was unpaid. Within Goldman, the possibility had launched speculation about exactly which intern might be the stripper. Outside of the firm, it was being treated as a delicious scandal.
But is there really a stripper working at Goldman?

Read more »