SEC

In spite of Republican SEC Commissioner Daniel Gallagher’s complaints, the Volcker rule is here. Read more »

Perhaps it is not the most important insider-trading trial of all time. But today’s jury selection in SEC v. Mark Cuban might mark the end of the beginning of what seems like the longest insider-trading case of all time. And, in spite of the reputation of the chief protagonist (or antagonist, depending on your point of view and whether or not you are a fan of Dallas-based sports teams), it’s not likely to be a particularly entertaining insider-trading trial. Read more »

Luckily, Robert Greifeld was able to solve that problem faster than the problem that led to the little get-together.

SEC officials on Thursday told exchanges to work with other market players to come up with “comprehensive action plans” to ensure that the data feeds are resilient, and to ensure the soundness of other “critical infrastructure systems,” according to an SEC statement.

Thursday’s SEC meeting, attended by top executives from exchange operators Nasdaq, NYSE Euronext, BATS Global Markets Inc., Direct Edge Holdings LLC, and others, was marked by one snafu. Nasdaq Chief Executive Robert Greifeld was 40 minutes late due to transportation problems, according to people who attended.

And lest you thought that (slowly outgoing) CFTC Chief Gary Gensler was going to let Mary Jo have all the fun, think again. Read more »

Technological ineptitude has kept some civil-servants at the SEC pretty busy this year. And entertained: Without any big-game stock exchanges screwing up lately, they’ll bide their time with one that hosts a whopping 0.4% of all U.S. stock trading. Read more »

Remember, back in 2009, when Phil Falcone’s personal accountants realized that the hedge fund manager owed the government more than $100 million in state and federal taxes? And he decided to come up with the cash by “loaning” himself $113 million from a gated investor fund? It’s one of our favorite Falcone stories and we bring it up today because it’s one of the reasons, among many, that the Harbinger Capital founder just agreed to pay the Securities and Exchange Commission $18 million, admit wrongdoing, and take a five year involuntary break from the securities industry. For those who need a refresh, here’s how the idea for Falcone to help himself to the money came about, courtesy of the SEC:

1. After figuring out Falcone was in the hole for over one hundred mill, Phil’s accountants informed Harbinger’s COO, Peter Jenson, of the problem.

2. Jenson made some calls and let his boss know that “no bank would accept Falcone’s hedge fund interests as collateral.”

3. Jenson suggested that Falcone “proceed with appraisals of Falcone’s two Manhattan townhouses and artwork, and raised the possibility of borrowing against other assets, including Falcone’s interest in a National Hockey League team and an estate on the island of St. Barts.”

4. Falcone said nothing but quietly stewed. Borrow against his interest in the Minnesota Wild? He couldn’t believe Jenson had the balls to even mention it. Especially when all that investor money was just sitting there, practically begging to be used… Read more »

Maybe this is how Gary Gensler goes out with a bang? Read more »

  • 07 Aug 2013 at 9:40 AM

Everybody Will Always Be Suing BofA Over Mortgages

These lawsuits against Bank of America are pretty lame, aren’t they? The SEC and Department of Justice each sued BofA yesterday for fraud in a 2008 prime jumbo mortgage securitization but it doesn’t really feel like fraud. The guns are smoke-free. The DoJ gets itself all excited because someone proposed including some bad mortgages in the deal, and a Bank of America trader said of those mortgages that, “like a fat kid in dodgeball, these need to stay on the sidelines,” but they did! The trader thought some of the mortgages were crap, and they were crap, and so they weren’t included in the deal. The system worked! It’s like if Fabulous Fab emailed his girlfriend saying “I am creating monstruosities,” and she told him to stop, and he did.

The complaints put their fraudy eggs in two main baskets. The first is that Bank of America omitted to tell investors some material facts, of which the most important is that 70% of the loans in this securitization were wholesale loans (originated through brokers), and that wholesale loans were worse – for both credit and prepayment risk – than loans originated by BofA directly. Read more »