Some people take high school basketball more seriously than others...

Over the past several years, much has been made about the supposed incompetence of the Securities and Exchange Commission. The regulator failed to realize Bernie Madoff had been running an illegitimate Ponzi scheme, despite more or less being told by Bernie Madoff himself, "I am running an illegitimate Ponzi scheme." It went after David Einhorn, when it should have been going after Allied Capital, the company the hedge fund manager told them was committing fraud. Its proposal for stepping up investigators' games was to start a Fraud College.* Until recently, it employed individuals in the office responsible for "ensuring exchanges follow guidelines concerning...computer audits, security, and capacity" who had "little or no experience with exchange technical matters." At this point, there have been so many stories about the SEC getting things wrong that the default is to assume it fucked up, even when that is not actually the case. What's more, even when Team Schapiro is on top of its game, resources are so strained that many scams that should be caught fall through the cracks. So you can maybe understand why a group of "high school buddies," along with a few other guys they picked up along the way, who were engaging in securities fraud, weren't too worried about getting caught.

As Dealbreaker historians will recall, last March marked our first Dealbreaker NCAA Tournament Challenge. It was inspired by a financial services hack who made the public announcement that he planned to (anonymously) report any colleagues he caught filling out brackets and keeping tabs on their picks during business hours. At the time, we encouraged you all to enter as many pools as were available, making it impossible for him to keep up with the amount of people and their offenses he needed to rat out, and created one to do our part. Is this guy still on the loose? He very well might be but regardless: never forget. To that end, sign up for the Second Annual Dealbreaker NCAA Tournament Challenge today. If you need reason beyond being able to say you won the DBNCAATC, first place will receive dinner for him/herself plus some colleagues and/friends at Peter Luger's, an outing funded by us,* a Greenlight Capital messenger bag, a Pershing Square golf umbrella, a pair of Third Point-branded running sneakers, and an I Heart Dealbreaker button.** The pool will once again be managed by Dealbreaker Commenter and Friend NakedShort, who, along with myself, will answer any questions you might have, provide color if warranted (rip everyone’s brackets to shreds, call out the bottom 5 performers), etc. Sign up here now.*** So it is abundantly clear, if you do not want participants to know your real name, MAKE SURE TO FILL OUT SOMETHING ELSE IN THE NAME FIELDS. For example, if your ID is Godswork, rather than writing Lloyd B, enter first name: Gods, last name: work. To that end, if you don’t want people to see your email address, from the bracket page, click ‘options’ and then ‘hide email.’ If you feel it necessary, create an entirely new email account specifically for this challenge. Finally, don’t use HisHoliness as your ID because Alan Greenspan’s already called dibs. The pool password is: animalliar Dealbreaker NCAA Tournament Challenge [CBS Sports] *Last year we offered Wall Street North favorite Beamers Cafe, but the winner had "already seen all Beamers had to offer," and choose an alternative venue. This year, feel free to think outside the box. **If any other hedge funds, private equity firms, or banks would like to be represented via swag, feel free to get in touch! ***NakedShort says you have until Thursday morning to fill out a bracket but you should just get on this ASAP.

Benjamin Wey apparently had a lot of balls in the air.

Remember Garrett Bauer? For those who need a refresher, GB was a trader (who "mostly worked from home") who was charged last year for running a decades-long insider trading scam with an M&A attorney, Matthew Kluger, that involved stealing information from several law firms. (In April 2011, 20 FBI agents knocked on Bauer's door to arrest him which, while terrifying, didn't come as much of a shock-- the duo had recently become suspicious that the authorities were onto them and, naturally, went about destroying evidence, a process Bauer recounted to a cooperating witness in a conversation he didn't realize was being recorded, telling the CC: "My heart was beating ten thousand miles an hour. I went right up to my apartment and I broke the phone in half and went to McDonald's and put it in two different garabage cans. And someone was watching me. I thought it was an FBI agent. And I asked him, 'Do you know me? You look familiar.' And, like, I was so panicked. I literally didn't sleep that entire night...I can't sleep. I am waiting for the FBI to ride into my apartment. I am on edge all night thinking they are coming in.") Anyway, Bauer ultimately pleaded guilty and is set to be sentenced today. Though he could receive up to 11 years in the big house, a judge will be taking into consideration letters "expressing support or urging leniency" sent on Bauer's behalf, some of which were written by fans he's gained working the college lecture circuit the past few months, explaining to undergrads why they don't want to follow in his footsteps (hint: it involves sleeping on bunk-beds). “I’m here hoping you won’t commit the same crime I committed, insider trading,” Bauer told the students at NYU’s Stern School of Business in February. “I feel remorse. That’s why I’m here. It’s my way of trying to apologize to everyone for what I’ve done and try to make amends.” Bauer said he hopes that his “scared straight” message, delivered in 147 speeches since last fall at business schools, law schools, churches and synagogues, will move the judge to grant him leniency. Sentencing judges can consider whether a defendant has accepted responsibility and shown remorse for his acts. “I’m not blind anymore,” Bauer said in an interview. “I see how wrong it was, how unfair it was to everybody else that’s trading. You get away with it once, and then you think you can get away with it every time. I almost never considered the question of getting caught. It was more a question of let’s figure out a way to make money and not lose money.” Bauer spoke several times a week in person or via Skype at schools including Harvard University, Yale University, the University of California at Berkeley, the University of Texas, the University of Michigan and Duke University. He booked his own speeches, sometimes called “Confessions of an Inside Trader.” Bauer gave the same basic narrative in two appearances observed at NYU, as well as at Cardozo Law School in New York, Drexel University in Philadelphia and a Rutgers University class in Jersey City, New Jersey. Bauer, lean at 5-foot-11 and 145 pounds, favors button-down shirts and khaki pants. He speaks rapidly in a nasal voice, lacing his account with jokes...In every talk to students, Bauer discussed how 20 FBI agents came to his apartment to arrest him and how they played the tapes for him, as well as his time in the Hudson County Jail. He tried hard to show no emotion to violent criminals. “Saying it’s a scary place kind of understates it,” he said. “It’s the scariest place on earth.” At least one professor believes Bauer's talk scarred his students for life, which should count for something. And according to Sameen Singh, a recent Stern grad who will soon start a job at Morgan Stanley, U.S. District Judge Katharine Hayden ought to go easy on the guy, who is just another bro. “I was impressed by how human he was and how his friendships and relationships played a role in his crimes. My friends were quite taken aback by how similar he was to them. He came from humble beginnings, and he’s not a deviant mastermind criminal. He’s just a regular guy.” Prison-Bound Bauer Reprises ‘Confessions Of An Inside Trader’ [Bloomberg]