The outspoken, flaxen-maned regulator is not going to be chairman of the CFTC. So, with this, he’s achieved all he will achieve, and will take his bows, depriving the financial world of a second hirsute overseer in as many days. Read more »
An important element of any Wall Street education is figuring out what shady practices will win you a reputation as a genius, what shady practices will win you a reputation as a scumbag, and what shady practices will win you a prison sentence. There is substantial overlap!1 That education is extremely contextual, and your intuitions about what shadiness flies in one business won’t necessarily help you in another, or in court for that matter. For instance I grew up in a corporate equity business, so I’d be happy to tell you why Yahoo!’s share repurchase from Dan Loeb wasn’t insider trading but you can probably figure that out on your own. Meanwhile I have no idea what to make of spoofing, but it seems like Panther Energy Trading did some of it, and now they are in trouble: Read more »
If Charlie Gasparino And The Fox Business Police Were In Charge, Jon Corzine Would’ve Been Nailed Years AgoBy Bess Levin
As you may have heard, earlier today the Commodity Futures Trading Commission charged Jon Stevens Corzine for (allegedly!) misusing nearly $1 billion in customer funds at MF Global. According to the CFTC, this was able to happen in large part because JSC “did not enhance MF Global’s deficient systems and controls sufficiently to ensure that the firm’s increasing reliance on FCM cash did not result in unlawful uses of customer money.” This pissed off Fox Business reporter Charlie Gasparino for two reasons, both of which he shared with CFTC Commissioner Bart Chilton this afternoon:
1. He wrote about MF Global’s insufficient controls two years ago, ergo, the CFTC could’ve and should’ve brought the charges against Corzine way back then, instead of dragging its ass. In fact, Chaz says that on his watch, we would’ve seen action within one week’s time.
2. No fraud charges? What’s that about? Add it to the list of things CG would get done in his capacity as Senior Kicker of Ass and Taker Of Names. Read more »
Finally, boys and girls, I want to tell you a bit about a children’s story. Once upon a time in a faraway land there lived a sweet young maid named Little Red Riding Hood—yeah, her. … Now, ye of little faith, before you think I’ve stopped carrying on your wayward son from futures, markets, Massive Passives and technology, hold your horses, or cheetahs or wolves of a color of your choice. Whatever they are, just hold ‘em a cotton-picking, or corn, bean or rice-picking minute! Maybe it is Minute Rice—I forget. The rice guys can help me out later. Read more »
It’s getting to be a struggle to be amused by Libor manipulation chats. RBS took its lumps today, and the CFTC and FSA orders are full of quotes, and you can read them in various round-ups, but, meh. Even Bart Chilton is bored; today’s imagery (“sends a signal to those who would monkey around with benchmark rates … much more than a slap on the wrist …”) is a letdown after his UBS masterpiece (“Financial sector violations are hurtling toward us like a spaceship moving through the stars”) just a few weeks ago. I get it! Everyone manipulated Libor! In writing! And then they were like “heh, fukin awexome man, u manipluated libor, gud work, i sexx u now, w champain.” Fabulous.1
The last of the UBS Libor settlements to come out was the U.S. one and it has some of the best quotes. There’s the yen swaps trader who said “I live and die by these libors, even dream about them.” There’s … I mean, there is the life and career of Bart Chilton, in toto; here is a thing he said:
“A Conscience Isn’t Nonsense”
Statement of Commissioner Bart Chilton on UBS Settlement
December 19, 2012
Every so often, folks wonder if some in the financial sector believe that having a business conscience is nonsense. Financial sector violations are hurtling toward us like a spaceship moving through the stars. All too often, penalties have been a simple cost of doing business. That needs to change.
Particularly good are the exhibits to the criminal complaint against Tom Hayes and Roger Darin. We’ve previously met Hayes, cleverly disguised as Trader A; he was the senior yen swaps trader at UBS in Tokyo. Darin was the short-term rates trader “in Singapore, Tokyo, and Zurich,” though probably not all at once; he and his team submitted yen Libors for UBS. You can guess what happened when they got together!