(M)embers of Congress, who often gain access to inside information about a company while they are lobbied and who also have some ability to influence the fate of companies through legislation, return a profit on their investments that beats market averages by 5 to 10 percent per year, a remarkable rate that would make even Bernie Madoff blush.
Nate Silver, “The Signal and the Noise,” page 342. (via joshsternberg)
The STOCK Act, passed by a heavy margin to hopefully curtail congressional insider trading, has encountered legal challenges since last year’s passage, and full implementation won’t occur until April 2013.
» Raj and Rajat: Back in 2011 Raj Rajaratnam, the founder of the once-colossal Galleon Group hedge fund management firm, was sentenced to 11 years in prison for insider trading. Rajaratnam had gained choice information unavailable to the public at large by using a series of secret contacts – one of whom, Rajat Gupta, has now faced the music himself. Prosecutors successfully argued that Gupta, a former board member of both Goldman Sachs and Procter & Gamble, was one of Rajaratnam’s sources, leaking him the details of Goldman’s first-ever quarterly loss in late 2008. Convicted on four out of six counts of insider trading, Gupta will likely face prison time when sentenced later in the year.
thenoobyorker says: I would love to see this not end with Rajaratnam, they may use him as an example but there are others that could/ should go to jail as well.
» SFB says: Assuming that’s how a lot of people feel about the situation. There were a lot of people who did bad things during this era. How it seems to us that financial industry crimes tend to happen is that someone takes the fall for something that goes way beyond that person. In a lot of ways, that’s what the Occupy movement seems to be about — not letting that simply happen. — Ernie @ SFB
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Thanks. I guess my thoughts are as follows:
1. I think...
minusmanhattan asked: I guess they didn’t have a shredder?
» We say: Hard drives and flash drives don’t really work with shredders. He had to put more work into it than that. On the plus side for him, finding those hard drives is going to likely be impossible now, but on the down side, the messages he reportedly sent to the snitch are probably proof enough.
Oh it’s easy. You take two pairs of pliers, and then you rip it open. Put ‘em into four separate little baggies, and then at 2 a.m…. 2 a.m. on a Friday night, I put this stuff inside my black North Face jacket, … and leave the apartment and I go on like a 20-block walk around the city … and try to find a, a garbage truck. And threw the @*^! in the back of like random garbage trucks, different garbage trucks … four different garbage trucks.Hedge fund manager Donald Longueuil (reportedly) • In a series of messages explaining how he got rid of key evidence in an insider trading case. The details, from a government complaint, were unsealed today. He reportedly trolled the streets of Manhattan looking for a way to throw away a bunch of documents, including a flash drive and two external hard drives. So he chose to destroy them and throw them away in separate garbage trucks in the middle of the night. Sounds like our kind of party. Too bad the guy who he reportedly explained this to was cooperating with authorities. Oops. source (via • follow)
You know Countrywide? Of course you do, if you have any knowledge of big evil companies that screwed millions of good people by convincing them to get into subprime mortgages. Before the proverbial doo-doo hit the fan, the company’s former CEO, Angelo Mozilo, cashed out big time, using his insider knowledge to ensure a big payday. Now, a couple years after the fact, the SEC twisted his arm until he agreed to forfeit a bunch of that money. The details: