A tip too far?

Just another example of blatant arrogance by the Wall ST. set, glad to see that Goldman is finally getting the press it deserves!
http://www.democracynow.org/blog/2011/2/22/matt_taibbi_why_isnt_wall_str... For more fun viewing.

White-collar criminals have the capacity to clear bank accounts discreetly and they can cause serious damage to the economy than blue-collar criminals or muggers!

“A man who has never gone to school may steal from a freight car, but if he has a university education, he may steal the whole railroad.” Franklin D. Roosevelt

The World needs protection from white-collar criminals!

"It takes 20 years to build a reputation and five minutes to ruin it. If you think about that, you'll do things differently"...Warren Buffet:

What worries me, when I read of cases like this, is the number of cases that could be, but aren't, pursued due to lack of resources, difficulty in gathering enough evidence to secure a conviction, tracks being too well hidden, a quiet word in the shell-like of those directing the investigations by people in high places, the risk of damaging 'vital national interests', etc. And what is even more worrying, when the net is closing in, is the ability of those accused to agree settlements that obviate convictions and evidence emerging in open court.

But I suppose it was always 'one law for the rich, one law for the poor'.

"It’s one thing to topple a hedge fund manager, but it’s quite another to bring down a major figure in corporate America."

Why?
Wrong is wrong. Illegal is illegal.
Surely insider trading is a crime whether it be on the trading floor or in the oak-panelled boardroom?

And if a few more titans of the corporate universe were brought to heel would it be such a bad thing?...Put Blankfein and Cohen, Dimon, Moynihan, & Co on the list.

See if the prospect of prison modifies their behaviour where fines, judgements, and penalties seemingly fail.

"And if a few more titans of the corporate universe were brought to heel would it be such a bad thing?...Put Blankfein and Cohen, Dimon, Moynihan, & Co on the list."

Yes, a little jail TLC as a just recompense for their hubris would do the country good.

Does anyone ever wonder what happens to the money when these guys are convicted? How is it fair that they still get to keep all their ill gotten gains, money waiting for them when they get out of prison?

(This next part is taken verbatim from a management consultant I met at a pub quiz, he may have had few and it is only one person, but his answer to my question about what his job entailed was illuminating.)

Me: "Basically, a consultant is hired because a customer believes they have a problem. My job is to find that problem and recommend changes. If I can't see any obvious problems, I have to recommend changes anyway because that's what the customer hired me for."

Incredulous I asked, "but if nothing actually needs fixing, won't your solutions just end up causing problems?"

Him: "maybe, but, if that's the case, they'll probably hire us back to fix the new problems. In my experience, no one wants to admit to their bosses that's the consulting fee was a waste of money, it looks for the person who hired us. If there aren't any new problems from our solutions, then we also win because we found problems and then solved them. The client hired us because they believe something they have a problem and I'm not paid to disagree with them."

In my above comment, the first "Me:' Basically...'" is a leftover from editing out extraneous dialogue of us meeting and introducing ourselves. It should read, "Him: 'Basically.... '" I apologize for the typo.

In the prevailing climate where the rich don't go to jail unless they screw other rich people (hello, Bernie Madoff), I find it somewhat encouraging that the SEC would indict someone of Mr. Gupta's position -- especially in light of this recent article:

http://bit.ly/gLZF2k

There used to an old UPS commercial - two slick consultants spew the usual MBA nonsense to their client about how to improve efficiency, delivery, and streamlining operations. The client likes what he hears and says, "OK, sounds great. Do it." The 2 consultants look bewildered and say, "We are not the one who implement our proposal. We just propose it." Consulting in a nutshell.

**Hedge protection was designed to prevent producers, buyers and sellers of losses on oscilation in prices or harvest breaks down. The speculators and their accumplices, transformed in fake derivatives of all classes. These derivatives are producing the enormous value of hundred trillion dollars being continuosly and constantly negociated in all the markets throughout the world and the cause of the hyper-inflation that affects mankind.

It will indeed be interesting to see what happens in this case. I always considered the Wall Street people to trade on inside information. What did this big fish get in exchange for his $18 million worth of info??

chipojo wrote:

"Hedge protection was designed to prevent producers, buyers and sellers of losses on oscilation in prices or harvest breaks down. The speculators and their accumplices, transformed in fake derivatives of all classes. These derivatives are producing the enormous value of hundred trillion dollars being continuosly and constantly negociated in all the markets throughout the world and the cause of the hyper-inflation that affects mankind."

That's well expressed, chipojo. But some may want it justified a little more. If so, here's a paper on the subject that's now in the hands of a dozen highly-placed regulatory authorities and politicians on both sides of the Atlantic:

http://www.authentixcoaches.com/ACdsFCF-1.html

Here's its summary:

Derivative contracts can rationally be classified – prospectively, from the perspective of the economy as a whole -- as either functional or very likely to be dysfunctional, although "the Street" pretends otherwise. Therefore a charge levied at the writing or exchange of very-likely-to-be-dysfunctional derivative contracts would usefully inhibit dysfunctional trading without throwing the "good functional derivative babies out with the dirty bath water of dysfunctional derivatives". Financial instability would be lessened and coherence between financial and real sectors would grow again. This paper, by a coach to a manager of trading at a major international bank, explains how derivative transactions can be classified either as likely to be functional or as very likely to be dysfunctional for the economy as a whole. It then sketches how such a charge might be calibrated in practice to bring about critical financial reform objectives.

If this paper were to be put in the hands of every participant in the G20 processes concerning financial reform, it won't be long before the problem chipojo summarizes is ended. So, I invite interested readers to send a letter to the highest placed person you personally trust explaining why the paper above will interest your celebrity decision-maker in the context of something you and s/he both consider to be a grave one.

Didn't he watch The Sopranos? Always use a pay phone.

This is more significant than you realize. I predict that the same forces that drive the Tea Party will, in 10 years, criminalize almost everything hedge funds do. The politicians will simply say they want to "level the playing field". Hedge funds are about the opposite. "Alpha" could be punishable by 10 years in prison. The very effort to prevent this will fuel it as "the vast hedge fund conspiracy" is brought to light.Is the ----state's pension fund underfunded? Can we perhaps find a hedge fund that managed part of their money.... If you had to pick a scapegoat of the future what would you see as a likely candidate? Who has the most hubris? Could it be the self-styled masters of the universe (whose business model is hubris writ large)? I can imagine the irony of the publically traded hedge funds being shorted by other hedge funds. Is there anything to prevent them from shorting their own stock? So what we have here is act one of what promises to be a highly entertaining drama.

Eureka! All that is needed is a simple law that allows taxpayer funded entities (pension funds,etc.) to collect treble damages for financial mismanagement of their assets, with the latter defined as... whatever. State & local government underfunded pension crisis solved!

Hats off to SEC...Great thing about Corporate America is that they moved quite swiftly against Rajat Gupta unlike in the case of Bernei Madoff who literally & financially ate 'Corporate America under the watchful eyes of SEC...'-Insider trading is becoming a menance because of the greed factor...& anybody who dares to eat the shareholders's wealth should be given exemplary punishment instantly.

Here, Sebi suffers to take strict decisions,like,in case of Ramalinga Raju of Satyam which puts our watchdog to shame. Prof Gurbir S Khera-Finance educator

It's about time McKinsey takes one on the nose. They were up to their eyeballs in the Enron/California electricity price gouging business, but skated on one of the biggest frauds in history.

Nothing against individual consultants, or auditors for that matter, but in general these folks go into these large companies, learn a lot that might enable them to predict short/medium term stock prices and the idea they don't drop a word or two with friends now and then is absurd.

That's right let the scapegoating begin Rajat Gupta worst case is responsible for a measly $50 mn in misappropriated profits so lets hang him!I am not saying he's a saint but like the poor Societe General trader now languishing in prison on the other side of the pond he is relatively a bit player...

OTOH the good folks at Goldman sachs,lehman brothers,AIG etc etc which duped the US public of 100s of billions of dollars are getting massive million dollar 'market determined' bonuses and give lectures on ethics and good corporate governance.