The conflict being that the buddies have fled to Poland and don’t plan to return any time soon. Read more »
Ed. note: This is a new weekly column by Elie Mystal, Managing Editor of Above the Law Redline, wrapping up the week that was in law and finance. Elie is not a practicing attorney, and anything he says that you listen to can and will be used against you.
The Only Issue I Care About This Week: We Have Better Things to Do Than Prosecute Insider Trading. That’s the title of a Justin Fox article in the Harvard Business Review. Sadly, I think he’s right.
In broad strokes the world can be divided up into three types of people:
* Group 1: Yokels who hear “insider trading” and shout “rabble rabble” at someplace they think is called “Wall Street” while they sharpen their pitchforks.
* Group 2: Wealthy elites and their media spokespeople who believe insider trading is a “victimless crime” as if Peter Gibbons from Office Space is their spirit totem.
* Group 3: Prosecutors who want to be Governors and are trying to shore up the yokel vote.
It’s all terrible. EVERYBODY IS WRONG ALL THE TIME. The people who care about rich people “cheating” don’t even understand what insider trading is anymore. The people who cheat have priced in the risk of getting caught. Over-matched regulators bite at the ankles of symptoms while being totally unable to address root causes.
I believe that we could live in a world where people who trade on material non-public information suffered criminal penalties severe enough to make them stop. But I also believe the Mets are one bat away from being a contender. Reality, it turns out, doesn’t give a crap about what I believe.
Anthony Chiasson and Todd Newman will be enjoying themselves this evening. Preet Bharara, less so. Read more »
Last December, SAC Capital portfolio manager Mike Steinberg was found guilty on one court of conspiracy and four counts of securities fraud. In May, he was sentenced to 3.5 years in prison, despite asking for leniency on account of the fact that he once raised money for a friend’s organ transplant with a bake sale. So, you might expect a guy in his position to be feeling pretty glum these days and pretty pessimistic about his prospects, particularly those of the professional variety. Yet, on the contrary, Steinberg is actually exhibiting signs of a man not just walking on sunshine but downright bullish about his career trajectory. In addition to appealing his sentence, the ex-SAC manager is already making plans to dive back into the investing game, ASAP. Read more »
Issue #1: How can you get a permit to do a damned illegal thing?
Bitcoins are a “real” commodity, so says the Commodity Futures Trading Commission. Commissioner Mark Wetjen “I do believe we have the authority because if you think of any reasonable reading of our statute, bitcoin classifies as a commodity, “I do believe we have the authority because if you think of any reasonable reading of our statute, bitcoin classifies as a commodity.”
Well maybe if Wetjen wishes really, really hard, Tinkerbell will spring to life and sprinkle enough regulatory pixie dust to give the CFTC the authority it believes it should have. Read more »
Unfortunately, this is a business, not pleasure trip: yesterday marked Day 1 of 3,285 of his sentence for orchestrating the largest insider trading scheme ever. Read more »
Over the last several years, as nearly a dozen former SAC Capital employees have been convicted of securities violations, the firm has taken many steps to redefine its image, from one of a bastion of insider trading to one where such actions are not only frowned upon but strictly prohibited. Such steps include but are not limited to: paying over $1 billion in fines; changing its name; and turning itself into a family office. Last month, Point72 Asset Management, AKA the hedge fund formerly known as SAC, even went so far as to announce that it would be monetarily compensating employees for “setting a proper tone and example on compliance and doing the right thing.” You’d think that all of these things– including the fact that a whole bunch of ex-SAC employees are doing time– would go far to deter people currently working at the hedge fund from engaging in insider trading. And yet, someone in Stamford apparently thought it was necessary still to take away one final temptation from them. Read more »
In April 2011, Wilson Sonsini Goodrich & Rosati employee Matthew Kluger was charged with insider trading with a couple of his buddies, in a scheme that went back some 17-odd years. This spooked a fellow WSG&R employee named Dimitry Braverman, because unbeknownst to the Feds, he was running a little insider trading campaign of his own, separate from Kluger’s. Despite the fact that he probably worried about having gaps in his résumé (2009-2011 Insider Trading Professional, 2011-, ???), Braverman decided to pump the brakes on the material non-public information stuff for a while, the Kluger business likely being a bit too close for comfort. About a year later, though, not too long after Kluger was handed the longest insider trading sentence in U.S. history, Braverman got that familiar itch again, an itch more powerful than any fears of getting caught, which he presumably dismissed with a “Fuck it. I’m getting back in the game.” Read more »