compliance

Another, alas, did not. Read more »

  • 20 Feb 2014 at 1:23 PM

Martin Scorsese Goes Too Far

Back in December, a movie called the Wolf of Wall Street was released on the big screen. Perhaps you’ve heard of it? It was based on a book by the same name, penned by a man named Jordan Belfort while he was doing time for ripping off thousands of people via his boiler room operation, Stratton Oakmont. And while Belfort himself has offered glowing reviews of the film and the lengths Leonardo DiCaprio went to really capture his hooker-banging, Quaalude-snort essence, one man is not as pleased.

Andrew Greene is suing Paramount Pictures and others associated with the film, arguing that he…was unfairly depicted as morally bankrupt by actor P.J. Byrne. “The motion picture contains various scenes wherein Mr. Greene’s character is portrayed as a criminal, drug user, degenerate and/or devoid of any morality or ethics,” the suit states. “The motion picture’s scenes concerning Mr. Greene were false, defamatory, and fundamentally injurious to Mr. Greene’s professional reputation, both as an attorney and as an investment banker/venture capitalist, as well as his personal reputation.” Greene’s lawyer, Aaron Goldsmith, said Greene was actually one of the few responsible workers at the now-infamous stock firm for which he and Belfort worked. “Andrew Greene worked diligently to create an environment of regulatory compliance and oversight at Stratton Oakmont,” said Goldsmith, who is handling Greene’s case with lawyer Stephanie Ovadia. “He was the driving force behind the implementation of several such procedures.”

Whether these procedures were successful or not is beside the point. Also beside the point are Greene’s complaints about being a degenerate. If Scorsese wanted to portray him as such for entertainment value, fine. That’s his prerogative as a filmmaker and really, what can be said about a man’s professional reputation that has not already been said by having the title “Chief Compliance Officer” and “Stratton Oakmont” on his resumé? But when Martin Scorsese made the decision to make a mockery of Greene’s toupée, in not one but several scenes, he went too far. Much too far. Read more »

The architect of SAC Capital’s extensive compliance policies and procedures within its exceptional supervisory structure is on the way out. And not, as you might think, due to certain guilty pleas to non-compliant behavior or felony convictions for the same, but because the new smaller, kinder, gentler, family-friendly SAC (or whatever it’s going to be called) won’t be doing any of the things it might have done in the past, and therefore does not need to spend quite so much money on compliance anymore. Read more »

Enough, already! You don’t need to increase your compliance staff 20-fold; you just need to stop insider-trading. Read more »

As those of you who’ve read today’s criminal indictment against SAC Capital know, prior to September 2008, the hedge fund had a policy to “automatically purge all instant messages after 36 hours and all e-mails not affirmatively saved after 30 days.” Then, after September 2008, a “revised document retention policy” was adopted, wherein everything was saved. Furthermore, employees of the firm were also aware that somewhere in a SAC office sat a team of people whose job in part was to review all electronic communications, scanning them for words, phrases, or conversations that might propose a problem for the firm. Luckily for anyone doing anything less than kosher, and talking about it, “prior to approximately late 2009, SAC’s compliance department rarely reviewed electronic communications by SAC employees for suspicious terms potential insider trading, notwithstanding the fact that the head of SAC compliance had recommended such searches to SAC management as early as 2005.” (It’s unclear what compliance was scanning IMs and emails for when it wasn’t looking for evidence of securities fraud, but tasty lunch orders to be intercepted in the lobby and ribald recaps of weekends in Hamptons share houses seem like good possibilities.) As late as, say, December 2008, one could be forgiven for forgetting that everything he or she was typing was being stored in a warehouse somewhere, but after that, they probably should have taken pains to not say anything that could be construed as minorly to majorly shady. And yet! Read more »

Assuming the positions have not already been filled, they’ve got openings in Boston and New York, if you know anyone looking to roll their sleeves up and get to work. Read more »

Citi today fired Mark Mahaney, its internet analyst, and was fined by Massachusetts securities regulators, for sending dumb emails to reporters. The Massachusetts consent order is here. Mahaney’s main misconduct1 is that on April 30 of this year a French reporter asked him about Google’s YouTube business:

  • Do you think that YouTube has been above your Total Net Revenue estimate 2011 ($876M)
  • Do you think that YouTube will be above your Total Net Revenue estimate 2012 ($1119m)
  • Do you think that they are largely profitable?

And Mahaney replied “Yes Yes Yes.” This was problematic because:

The information that [Mahaney] gave to the French Reporter had not been previously published. [He] had published a research report on Google, Inc. on March 21, 2012 and did not publish another research report until his interview with “All Things Digital” on June 21, 2012.

Two thought experiments. First, Mark Mahaney’s job was to drum up institutional business by producing actionable estimates and opinions about the stocks he covered. One way to do this is to publish research reports. Google, it is fair to say, is an important stock that he covered. He did not publish any research reports on Google for three months this year. What do you think he was doing during that time? Your choices are: Read more »