No jail time?
"Defendant in $250m fraud case free on bail; Bail set at $5m for ex-manager at hedge fund" by Larry Neumeister |
Associated Press, November 27, 2012
NEW YORK — A former hedge fund portfolio manager accused of enabling a
quarter of a billion dollars in profits by passing along inside
information in one of the largest insider trading fraud cases in history
appeared in a Manhattan court for the first time Monday and was
released on $5 million bail, though his movements were restricted.
Mathew Martoma, 38, of Boca Raton, Fla., was read his rights by US
Magistrate Judge James Cott, who agreed to impose a bail package that
prosecutors and Martoma’s lawyers had worked out after his initial court
appearance in Florida last week. He had been free on $5 million bail in
Florida as well. Martoma must post $2 million in cash or property by
next week to satisfy the new bail requirements, which will limit his
travel to New York, New Jersey, Florida, and Massachusetts.
Martoma was arrested last week on charges that between 2006 and 2008,
he helped to engineer one of the largest insider trading frauds in
history. Martoma worked with CR Intrinsic Investors, an affiliate of SAC
Capital Advisors. SAC is owned by Steven A. Cohen, one of the world’s
richest men.
And need I note the other unique characteristic?
His court appearance lasted only 12 minutes and he was not required
to enter a plea, since an indictment has not been returned. Prior to the
hearing, he sat in the spectator section with his wife and lawyers
until his case was called....
Martoma was arrested on Nov. 20 in Florida. Prosecutors say he
exploited an acquaintance with a medical school professor to get
confidential, advance results from tests of an Alzheimer’s disease drug.
They say he shared the information with others, enabling more than
$276 million to be made illegally for his fund and others. The
government said in court papers that he caused other investment advisers
to buy shares in the drug companies, and then he and the others ditched
their investments before the public found out about the drug trial’s
disappointing results, allowing them all to make big profits and avoid
huge losses.
Unfortunately, that is standard operating procedure on Wall Street. Think the mortgage-backed securities scam, folks.
Court papers in Martoma’s case repeatedly allude, without using
Cohen’s name, to his dealings with Martoma in the lead-up to an
announcement about the drug trial.
The FBI subpoenaed SAC and other influential hedge funds in November
2010. Martoma is the fourth person associated with SAC Capital to be
arrested on insider trading charges in the last four years.
Cohen has not been charged with any crime. SAC spokesman Jonathan
Gasthalter has said the company and Cohen are cooperating with the
inquiry and ‘‘are confident that they have acted appropriately.’’
--more--"
Related: Former SAC portfolio manager Martoma indicted
"SAC Capital units settle with SEC for $614m" by Michael J. de la Merced | New York Times, March 16, 2013
NEW YORK — Two affiliates of SAC Capital, the giant hedge fund, settled insider trading charges with the Securities and Exchange Commission for $614 million on Friday, in what the agency said was the biggest ever settlement for such cases.
The settlements spare SAC’s founder, the billionaire Steven A. Cohen, who has not been charged with wrongdoing. Cohen, one of the most successful hedge fund managers in the world, has long been considered a target of federal investigators.
But the settlements represent one of the biggest financial coups by the SEC in insider trading cases yet.
The amounts paid by SAC surpass the $400 million that Michael Milken paid to settle charges by the agency in 1990....
Didn't Milken also serve jail time?
--more--"
Also see: The Hedge Fund House-of-Cards is Next
Has already collapsed.
"Change at top not expected to alter SEC’s course; New chief Walter likely to follow Schapiro’s plan" by Marcy Gordon |
Associated Press, November 27, 2012
WASHINGTON — The leadership of the Securities and Exchange Commission
will change next month. Its approach to regulation probably won’t.
Mary Schapiro will step down as chairwoman after a tumultuous tenure
in which she helped lead the government’s regulatory response to the
2008 financial crisis.
Replacing her will be Elisse Walter, one of five SEC commissioners,
whose career path has tracked Schapiro’s for nearly three decades.Walter
has served under Schapiro at the SEC and the Financial Industry
Regulatory Authority, the securities industry’s self-policing
organization....
James Cox, a Duke University law professor
and expert on securities law, said he wasn’t surprised that both of Obama’s choices to lead the
SEC have come from an industry self-regulatory organization. The Obama
administration ‘‘is not an eager regulator of the securities markets,’’
he said.
So despite all the political bluster and partisanship about the middle class and all, he's still a tool of the financial community. I guess that's why they let him be president again.
Walter, a 62-year-old Democrat, was appointed to the SEC in 2008 by
President George W. Bush. Earlier, she was a senior official at FINRA,
which Schapiro led before becoming SEC chairman in January 2009.
They finally found bipartisanship!
Schapiro will leave the SEC on Dec. 14. She was appointed by Obama in
the midst of the worst financial crisis since the Great Depression and
is credited with helping reshape the SEC after it was accused of failing
to detect reckless investments by many of Wall Street’s largest
financial institutions before the crisis.
Yeah, Schapiro(?) saved the system.
She also led an agency that
brought civil charges against the nation’s largest banks. Critics argued
that Schapiro, 57, failed to act aggressively to charge leading bankers
who may have contributed to the crisis. And consumer advocates
questioned her appointment because she had led FINRA.
--more--"
