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Article: Insider trading case targets big donor

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Insider trading case targets big donor

Steven A. Cohen, the multibillionaire hedge fund owner implicated in an insider-trading scandal, is a major political donor who has contributed heavily to big players in both parties.

Cohen and his wife, Alexandra, have donated more than $450,000 to the campaign committees and leadership PACs of Senate Majority Leader Harry Reid (D-Nev.), Senate Minority Leader Mitch McConnell (R-Ky.), House Majority Leader Eric Cantor (R-Va.) and other key lawmakers during the past several election cycles, Federal Election Commission records show.

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Article: Is The Federal Reserve Using Money-Laundering Techniques To Cleanse Banks’ Balance Sheets?

Article - Media

Is The Federal Reserve Using Money-Laundering Techniques To Cleanse Banks’ Balance Sheets?

Lawrence Hunter

Forbes, 29 October  2012

Drug lords, terrorists and shadow-government operators (but I repeat myself) use third party intermediaries to cool off and sanitize hot, dirty, and therefore useless money into pristine-clean and productive money that can be used in legitimate commerce. It’s called money laundering.

Characters operating in the shadows also use a form of reverse money laundering to defile clean money or redirect dirty money while masquerading its source so it can be siphoned away, re-channeled and put to use financing illicit activities such as terrorism and off-the-books, shadow-government operations (but I repeat myself, again) that Congress won’t authorize or fund. Think of it as repatriating dirty money and expatriating clean money.

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Article: EU ban on naked CDS short worries Asian investors

Article - Media, Publications

EU ban on naked CDS short worries Asian investors

Christopher Langner, Christopher Whittall, IFR, 23 October 2012

Some Asian fixed-income investors are grappling with how to hedge high-beta portfolios on the eve of the implementation of a ban on naked shorting of European sovereign CDS.

Until March this year, using European CDS bets to offset potential losses from a drop in prices of Asian high-yield bonds had become a fairly popular strategy. However, since regulators in Europe said they were banning the practice from November 1, many of those bets were unwound. Continue reading “Article: EU ban on naked CDS short worries Asian investors”

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Article: UBS rogue trader’s $2.3-billion ‘naked gamble’ nearly destroyed bank, court told

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UBS rogue trader’s $2.3-billion ‘naked gamble’ nearly destroyed bank, court told

Estelle Shirbon, Michael Holden

Reuters, 14 September 2012

Former UBS trader Kweku Adoboli arrived at Southwark Crown Court in London Sept. 14, 2012. Adoboli, was arrested a year ago when a loss of $2.3-billion came to light, and was charged with fraud and false accounting.

Paywall access to article.

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Fine: Fordham Financial Management Fined by FINRA

Fined

Fordham Financial Management Fined by FINRA

FINRA, August 2012

Fordham Financial Management submitted a Letter of Acceptance, Waiver and Consent in which the firm was censured and fined $10,000. Without admitting or denying the findings, the firm consented to the described sanctions and to the entry of findings that it improperly reported Execution or Combined Order/Execution Reports to OATS with a reporting exception code of “M.” The findings stated that the firm transmitted reports to OATS that contained inaccurate capacity codes.

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Filing: Anschutz Corp. v. Merrill Lynch & Co., Inc., 11-1305

Filing

Anschutz Corp. v. Merrill Lynch & Co., Inc., 11-1305

FindLaw, 14 August 2012

In a suit against Merrill Lynch and others, claiming market manipulation, fraud, control person liability, and negligent misrepresentation, district court’s judgment in favor of the defendants is affirmed where: 1) the market manipulation claims fail for the same reasons identified in Wilson v. Merrill Lynch & Co., which held that the same website disclosure at issue in this case contained sufficient information about Merrill Lynch’s support bidding practices to preclude a market manipulation claim; 2) district court properly dismissed the California Corporations Code claims as plaintiff fails to allege any injury or unlawful conduct in California; and 3) district court properly dismissed the negligent misrepresentation claims against the Rating Agency defendants as plaintiff fails to allege an actionable misrepresentation under New York law.

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Article: Barron’s Gary Weiss Caught Plagiarizing Matt Taibbi, Find-Replaces Style With Spin

Article - Media

Barron’s Gary Weiss Caught Plagiarizing Matt Taibbi, Find-Replaces Style With Spin

Patrick Byrne

DeepCapture, 7 August 2012

Two months ago a schlubby-but-savage Goldman lawyer named Joseph E. Floren made a mistake that caused some previously redacted information about Goldman Sachs to slip into the public’s hands. The event was ably covered by such globally-respected publications as Bloomberg, the Economist, and Rolling Stone.

Since May I have wondered, With the truth emerge at last in publications such as Economist, Bloomberg, and Rolling Stone, surely the Bad Guys must understand they have lost control of the narrative. Surely, I thought, they are working out some new damage control strategy to deflect or usurp the truth as it comes out.

And as always, Gary Weiss doesn’t let us down.

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Article: HSBC scandal further erodes credibility of UK banking industry

Article - Media, Publications

HSBC scandal further erodes credibility of UK banking industry

AFP, 22 July 2012

London: A scandal erupting at Europe’s biggest bank HSBC has added to concerns over the state of Britain’s financial sector amid the Barclays rate rigging affair and as the industry faces a major shake-up.

HSBC last week apologised and its head of compliance David Bagley resigned after US lawmakers accused the London-based bank of failing to apply anti-laundering rules, benefitting Iran, terrorists and drug dealers.

The HSBC affair follows hot on the heels of the Libor interest rate rigging scandal that has brought down top executives at Britain’s Barclays bank — most notably its chief executive Bob Diamond and chairman Marcus Agius.

Regulators are reportedly investigating HSBC, as well as Credit Agricole, Deutsche Bank and Societe Generale, over alleged manipulation of the Libor rate after Barclays was recently fined £290 million (Dh1.66 billion) over the affair.

Britain’s financial regulator, the Financial Services Authority (FSA), has said its Libor probe is looking at seven groups, which are not only British institutions.

Bank of England governor Mervyn King has meanwhile proposed that central bank governors and regulators discuss Libor reform at their upcoming meeting in Basel, Switzerland, on September 9.

Barclays has admitted attempting to manipulate the Libor and Euribor rates between 2005 and 2009.

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Article: FERC probes JPMorgan over electricity charges

Article - Media

FERC probes JPMorgan over electricity charges

Katarzyna Klimasinska

SF Gate, 3 July 2012

JPMorgan Chase & Co. is being investigated over potential power-market manipulation that inflated payments for electricity, according to the U.S. Federal Energy Regulatory Commission.

FERC, which has pledged to combat manipulation of prices, began its probe after reports last year of bidding practices by JPMorgan that were deemed abusive by California and Midwest grid operators, according to documents provided by the agency.

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Article: Naked Short Selling is Real – And It’s Fucking Up Our Economy

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Naked Short Selling is Real – And It’s Fucking Up Our Economy

Ben Makuch

Vice, 27 June 2012

Unfortunately, like many people out there, I don’t know my ass from my elbow when it comes to the economy. Sure I know a few terms like “recession” and “stock,” but ask me to explain stuff like the “Eurozone crisis” and I’ll get as far as “Apocalyptic omen.” That’s probably why businessmen can get away with pretty much anything; half of their concepts are so convoluted you need to have at least gave a shit about high school calculus to understand them, which most of us didn’t.

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Article: Barclays guilty of market manipulation

Article - Media, Publications

Barclays guilty of market manipulation

moneyweek, 27 June 2012

Barclays Bank is to pay a 290 million pound fine following an investigation by UK and US regulators into manipulation of inter-bank lending rates.

The bank’s top executives, including Chief Executive Bob Diamond, have agreed to waive their bonuses this year as a result. City watchdog, the Financial Services Authority (FSA), said Barclays’ regulation breaches were “serious, widespread and extended over a number of years”.

It accused the bank of having inadequate systems and controls in place until June 2010 and of failing to review its systems and controls at a number of appropriate points. Continue reading “Article: Barclays guilty of market manipulation”

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Article: Watchdog says jury out on CDS short-selling impact

Article - Media, Publications

Watchdog says jury out on CDS short-selling impact

Huw Jones, 18 June 2012

There is no firm proof that short-selling credit default swaps (CDS), blamed by some policymakers for exacerbating Greece’s debt problem, damages the underlying government bond market, the world’s top securities body said.

CDS are contracts written by large banks that insure the buyer against a default in an underlying asset such as a government or corporate bond. Continue reading “Article: Watchdog says jury out on CDS short-selling impact”

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Article: Austria extends naked short ban for some financials

Article - Media, Publications

Austria extends naked short ban for some financials

Reuters Staff, 29 May 2012

VIENNA, May 29 (Reuters) – Austria has extended until Oct. 31 its ban on naked short selling of shares in lenders Erste Group Bank and Raiffeisen Bank International and insurers Vienna and Uniqa, the FMA market watchdog said on Tuesday.

The ban had been set to expire on May 31. Only short-term transactions by market makers or specialists are exempt from the ban.

Short sellers sell borrowed shares in the hope they can be bought back at a lower price. Naked short-selling involves selling shares without first borrowing them.

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Article: Heist of the century: Wall Street’s role in the financial crisis

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Heist of the century: Wall Street’s role in the financial crisis

Charles Ferguson, 20 May 2012

Bernard L Madoff ran the biggest Ponzi scheme in history, operating it for 30 years and causing cash losses of $19.5bn. Shortly after the scheme collapsed and Madoff confessed in 2008, evidence began to surface that for years, major banks had suspected he was a fraud. None of them reported their suspicions to the authorities, and several banks decided to make money from him without, of course, risking any of their own funds. Theories about his fraud varied. Some thought he might have access to insider information. But quite a few thought he was running a Ponzi scheme. Goldman Sachs executives paid a visit to Madoff to see if they should recommend him to clients. A partner later recalled: “Madoff refused to let them do any due diligence on the funds and when asked about the firm’s investment strategy they couldn’t understand it. Goldman not only blacklisted Madoff in the asset management division but banned its brokerage from trading with the firm too.” Continue reading “Article: Heist of the century: Wall Street’s role in the financial crisis”