Mary Jo White

The SEC chair assures that nothing is fucked, vis-à-vis high frequency trading. Read more »

In case that was unclear. Read more »

Poor guy:

The Securities and Exchange Commission overruled its own enforcement division’s decision to settle a civil case with the high-flying money manager Philip A. Falcone and his flagship hedge fund, a rare reversal that signals a broader crackdown by the agency. … While the deal also included at least a two-year ban from raising new capital, a potential death knell to a hedge fund manager, that punishment came with a number of caveats. And in a a moral victory for Mr. Falcone, the deal also omitted a common provision that prohibits defendants from committing future violations with fraudulent intent.

Apparently SEC Chairman Mary Jo White killed the deal:

White, a former Wall Street defense lawyer, and Democrats Luis A. Aguilar and Elisse B. Walter, in a 3-to-1 vote, were concerned that Falcone wasn’t barred from serving as officer or director of a public company, said the people, asking not to be named because the deliberations aren’t public. The SEC informed Falcone’s Harbinger Capital Partners LLC of the decision yesterday, according to a filing from Harbinger Group Inc.1

Man it’s hard to be the SEC. Presumably they employ a lot of people who do, like, actual work. Read more »

This much she promises you. Read more »

The Wall Street Journal story today about the next Libor domino to fall – RBS, which will be coughing up $700mm or so to regulators in the next few weeks – is full of quietly hilarious lines, perhaps none more so than the Journal‘s deadpan clarification that “the Justice Department has the power to file criminal charges without the bank’s blessing.” For sheer backwardness, though, I think it’s hard to top this:

As part of UBS’s settlement last month, the Swiss bank’s Japanese unit pleaded guilty to wire fraud, a felony. Justice Department officials were heartened by the lack of a negative reaction in the markets and among regulators around the world to UBS’s guilty plea. Before the settlement deal, some officials had worried it could destabilize the bank. That has emboldened officials to pursue similar actions against banks like RBS, according to a person familiar with the matter.

The way a lot of people – sometimes even people at the Justice Department! – think about criminal law goes something like this:

  • If you do something naughty, we will charge you with a crime.
  • If you are convicted of that crime, bad things will happen to you.
  • You don’t want bad things to happen to you.
  • So you won’t do anything naughty.

This is called “deterrence.” All of the parts of it are important: if you are convicted of a crime and bad things don’t happen to you, then the whole system is mostly pointless. When the Justice Department is “heartened by the lack of a negative reaction” to a criminal conviction – when they’re like “yay, no deterrent effect!” – then … then … gaaah. Read more »