90.9 WBUR - Boston's NPR news station
Top Stories:
PLEDGE NOW
The Rajaratnam Case: Insider Trading On Trial

Raj Rajaratnam on trial. Insider trading, hedge funds, and the fairness of the US financial system, on trial too.

Galleon Group founder Raj Rajaratnam enters Manhattan federal court on the first day of jury selection on March 8, 2011, in New York. He is accused of making more than $50 million off of insider trading. (AP/ Louis Lanzano)

The biggest insider trading case in a generation, maybe in history, is going to trial this week in New York.

Hedge fund billionaire Raj Rajaratnam, charged with schemes that could put him in jail for twenty years. Incredible stuff. The guy who invests for the rich getting tipped off from practically inside corporate board rooms. Inside dope worth millions. Inside dope you don’t get. The wise guys say it’s rampant.

Nobody went to jail in the Wall Street meltdown. Maybe a big fish is headed to jail now. Maybe.

This hour, On Point: Insider trading, justice, and the US financial system.


Guests:

Gregory Zuckerman, senior writer and columnist for the Wall Street Journal, who has been closely following insider trading cases on Wall Street. He’s author of “The Greatest Trade Ever: The Behind-The-Scenes Story of How John Paulson Defied Wall Street and Made Financial History.”

Arthur Laby, associate professor at Rutgers School of Law where he specializes in securities law and regulation. Before joining the Rutgers faculty he served nearly ten years on the staff of the U.S. Securities and Exchange Commission.

More on our blog about the Rajartnam trial.

Please follow our community rules when engaging in comment discussion on this site.
  • Michael

    This stuff happens are the time, the SEC has been pretty much been underfunded and co-opted to look the other way. If you want to curve this start will a 5 year ban on regulators being able to join the companies they regulate and vice versa. Many Major Corporations do this for there Top Brass and the Government should follow suit as well(at least in this regard).

    If reports are correct it’s looking like 24 other people who engaged in insider trading maybe walking to catch this guy. Even if they do it still yet to be seen what the SEC can recoup and lord knows that the congress is not going to pass any laws preventing future abusive insider trading.

    But I do wish for one day they could reverse the 2 tier system and people like Rajaratnam could face what the rest of Americans would face for blue collar ones.

    Chappelle I plead the Fif
    http://www.youtube.com/watch?v=4CzocBkrWpA&feature=related

    Dave Chappelle On White-Collar Crime: “I Plead The Fifth”
    http://dailybail.com/home/dave-chappelle-on-white-collar-crime-i-plead-the-fifth-video.html

  • http://www.richardsnotes.org Richard

    In a sense earmarks and other forms of pork are a form of insider trading. Michael is right, in order to curb this we need shed a lot of light on the built in corruption up and down the system ladder, better fund the SEC, clean up Congress, and reform campaign finance.

    I’m not saying that Rajaratnam is a “little” guy but there are other fish upstream that also need catching.

  • Zeno

    I had to do a search to find out who this guy is (yep, once again its Hedge funds): http://www.businessinsider.com/eleven-things-you-need-to-know-to-follow-the-raj-trial-2011-3

    The defense has a good case for a US courtroom. Is insider trading a crime? “Raj was guilty of nothing but good money management and “shoe-leather” reseach.”

    http://www.businessinsider.com/raj-trial-prosecution-opening-argument-2011-3

  • Yar

    I can’t comment on the particular case because I don’t know anything about it. I can speak to the (un) fairness in the US trading system. The line between insider and outsider is blurred. Through use of technology and co-location of trade processing the US allows some groups preferred access. I define those groups insiders. Speed of trade should not prefer one group over another. The laws that I believe should be changed are the ones that allow high velocity trading.
    I believe this type of trading lowers the return for the average investors. In essence these market door watchers are a tax on trading. They monitor trades as they are about to occur and use algorithmic processes to tax or remove energy from the trading flow. This should be against the law. The classic definition of free market includes equal access to information on both sides of the trade. Very little trading is free in that sense of the definition. If all profits from trades held less than six months were taxed like gambling winnings, then maybe trading wouldn’t be such a gamble.

  • Ellen Dibble

    I think from the public point of view, the Rajaratnam case could function as a distraction, a red herring, like the tricks teams of pickpockets use to get people to look the other way. Yes, it’s an issue. But what an odd way to address the layers of abuse the American public has been enduring. Apart from my red herring hypothesis, I suppose the justice system has more trouble deconstructing financial shenanigans than the trouble the various banks have in deconstructing some of the mortgage packages in attempts to foreclose one home. So if the justice system is picking off outliers who are not part of the central Problem, which don’t involve certain still blurry main issues, because this is all the data they have had time to process, okay. I hope the prosecutors will make some headway in identifying the scoundrels before in dismay we start electing Republicans for whom the status quo is even more of a way of life.
    What scoundrels? It seems to me there is an ethical limp innate in human nature, and it is very easy to rise above this disability, which is very clear among all sorts of movers and shakers. It’s sort of the job of the masses to expose that, via art or democratic legislation or religious cohesion or public radio, and try to provide crutches for those whose ethical limp is obvious. When we talk about “honest work” we are saying there exists ways of flourishing that do not transcend our capacity for good judgment. Do the hedge fund managers need a “union” to normalize their values and evict the small-minded? — I mean, those too large-minded for their ethical boots — or bootstraps?

    • Tina

      Ellen, what a great piece you wrote! Amid the lofty questions you pose, this more practical part is still SO important:

      You said, “I hope the prosecutors will make some headway in identifying the scoundrels before in dismay we start electing Republicans for whom the status quo is even more of a way of life.” — Yes!

    • Tina

      Ellen, I’m also recently so often made aware that our teachers made us study the ancient Greek concept of hubris in the eighth grade for good reason. When I was 13, it seemed so boring and stupid. I’m hoping that it is still being taught. Could it be that an entire generation missed this lesson?

  • Ellen Dibble

    What about taxing each high velocity transaction?
    What about tax rate differentials in addition to the six-month one you propose. Held less than a week. Held less than one quarter.
    The idea of differential access — unfair, but how to define the privileged set.
    Could it be possible, let alone possible to legislate, to stop the use of algorithms and high-speed transactions? I doubt it. The degree of profitability of using mathematics to speculate would make it a large opportunity for banker/pirates.

    • BHA in Vermont

      You are, as usual, on top of it Ellen.
      I propose a tax structure for ‘investments’.
      - Anything held less than 24 hours is taxed at 110%
      - Less than a week: 99%
      For these, NO subtracting losses from other gains.
      - Less than a month: 95%
      - Less than 6 months: 50%
      - More than 6 months, the current tax rates apply

      And ‘after hours trading’? How unfair is that? If it is ‘after hours’ isn’t it by DEFINITION not allowed since the general public can’t do it as well? Close it down.

      Investing in company stocks and bonds SHOULD BE a stable capital base for those companies and a long term source of income (dividends/interest/capital gains from sale) to people who hold the stocks and bonds. People moving electronic ‘paper shares’ around after the IPO are providing ABSOLUTELY NOTHING of value to the company and nothing to society. Yet the people being talked about today are those who make 6 or 7 figures a year doing NOTHING other than moving paper around sometimes for pennies per “LOTS of shares” HUNDREDS or THOUSANDS of times a day.

  • Philonous

    Prison for property crimes like this doesn’t make sense. These are non-violent offenders, and they aren’t going to cause immediate harm if they’re on the street. What we ought to do is take all of their assets to repay the victims and then put them into community service jobs for however many years seems appropriate.

    Greg Camp
    Springdale, AR
    http://gregorycamp.wordpress.com/

    • BHA in Vermont

      I like this. Take EVERYTHING he has. Put him in the soup kitchen paying minimum wage for 20 years. NO ‘second job’. Any other money that comes his way (inheritance or whatever) goes directly to social services.

      • RobertoG

        Yes, but does he deserve soup?

      • Tina

        BHA, it will cost the public so much to administer this; the money will be entangled and hard to extract. NO!

        However, prohibitions against being able to work in any number of jobs and/or environments could be ONE of the punishments.

    • NightmareDaddy

      Bank robbery is a property crime too. So we are supposed to give a break to the rich coward who uses a the privilege of his position and power instead of a gun to rob the system? How typical. These people need to be punished brutally for being such a bunch of pussy thieves.

    • Tina

      NO!!!

  • DavidG134

    Close down the Department of Justice.

    There is no rule of law in America for the criminal rich.

    • Tina

      Don’t close down DOJ. Beware of their getting underfunded for political reasons!

      • DavidG134

        You are telling me that the Department of Justice can’t find anyone on Wall Street responsible for the biggest theft in history ????!!!!

        De-fund it entirely. It’s a farce.

        • Jim in Omaha

          Madoff whistle blower Harry Markopolos has said that virtually everyone in a position of power on Wall Street know that Madoff was engaged in illegal activity. But since they were making money off the same crooked system, they kept quiet. And when the house of cards, both Madoff’s and our financial system’s, crashed , they also kept all the money they “made”. Nobody has, and nobody ever will, be held responsible, for the biggest heist in history. Just another example of our essential civil institutions, such as the military, intelligence, health care, legal, big business, etc., being completely incompetent while enriching a tiny number of insiders.

  • Charlie Mc of Scituate, MA

    re: Ellen Dibble’s “ethical limp innate in human nature” sounds a lot like “original sin”, above which it is indeed not easy to rise, even by democratic legislation, religious cohesion or NPR. After all, it was the democratic vote of President Obama’s economic advisors which humiliated and eliminated Ms. Brooksley Born and her wisdom from saving us from the financial disaster. Can not she be induced to help prevent a new group of “wise guys” from leading us further into the mess. The “seven deadly sins’ to which we are all still fully susceptible,
    both lay persons and “wise guys”, must be seen for what long term damage they can cause.

  • Matt

    This case reaches far into the board rooms of elite, Fortune 100 companies. It would be hard to overstate how highly regarded, and MBA-certified are some of the people implicated. Consider Rajat Gupta, don of Management Consulting, and former head of McKinsey, who is alleged to have provided tips to Rajaratnam. Could this finally reveal some of the systematic ethical collapses that have taken place at the very highest level of American corporations?

  • Carole Benson

    My father, Blair Benson, won an emmy for developing video tape. I remember as a small child his telling us he wished he could buy stock in Sony but he couldn’t because he had insider information. I teach management classes and tell this story. Students ask if my father was nuts. This is the problem with the US today.

  • Loay

    From the Financial Times March 1, 2011
    “The top 10 hedge funds made $28bn for clients in the second half of last year, $2bn more than the net profits of Goldman Sachs, JPMorgan, Citigroup, Morgan Stanley, Barclays and HSBC combined, according to new data.”

    says it all.

  • Tina

    Isn’t this EXACTLY WHY the wealthy encourages the rank and file of the Tea Party to insist that “there is TOO MUCH GOVERNMENT REGULATION”!???!!

    • Tina

      Sorry – bad grammar. I’ll try again.

      Isn’t this EXACTLY WHY the wealthy who have infiltrated the Tea Party encourage the rank and file of the Tea Party to insist that “there is TOO MUCH GOVERNMENT REGULATION”?!?

      • Philonous

        Now turn off the caps lock, refrain from repeating words needlessly, use quotation marks appropriately, and leave off excess ending punctuation.

      • Yar

        Tina, If you join the community you can edit your posts. How meaning changes with an omitted word. Thanks for your contribution, I appreciate the point of view you seem to bring to these conversations.

        • BHA in Vermont

          Yar, How does one ‘join the community’?

          • Yar

            I did it by creating a Disqus profile, and confirming my email address. The software will then allows you to merge all comments you made using the same email address.
            http://disqus.com/
            Try the link above.

      • Dave in CT

        With all respect, that is just the knee-jerk red-herring argument. Yes, corrupt infiltrators of the grass roots Tea Party, who were disgusted with government/banking collusion in the wake of the predictable crisis, are cynical cronies of the elite.

        But “Too much government” ideas are not necessarily saying that inside traders and scheming CEOs should not be accountable, they are saying that Government in the form of The Fed (not even truly government, rather a private cartel) and well-meaning but corrupted agencies like Fannie/Freddie, are part of the problem, that ENABLE private malefactors on Wall St. to pursue their non-free market collusion and shenanigans.

        We need to stop conflating the obviously wrong idea of total anarchy or no accountability, with the ideas that government is part of the problem.

        Government in terms of a prosecutor of the Rule of Law, to maintain a corruption-free market, is critical. But government carrying out complicated social-engineering goals, colluding with corporations to carry out perhaps well-intentioned plans, has just been shown over and over to be too static at best, and corrupted at worst, and is a whole other kettle of fish.

        We can all agree on that concept can’t we?

        Baby with the bathwater will get us nowhere while Rome burns.

  • Dave in CT

    While insider trading is a corruption of the free market, and the laws we do have against it need to be vigorously pursued to prosecution, I think we still need to keep our ire and focus on the executives who herded us into the financial fiasco, collecting billions in salaries and bonuses along the way.

    If as the guests point out, those are hard cases, because we don’t know if laws were broken, then it must be time for some new laws that spell out clearly that cooking up too good to be true ponzi schemes that threaten small investors, retirement funds, and the national economy, using corrupted government incentives (Fannie/Freddie), and non-free market, if not also corrupted, malinvestment (The Fed currency manipulation = bubble theory of growth), is illegal, and punishable by total financial forfeit including family, and life in prison.

    We’d be surprised how well a true free-market with a level playing field would work, if corrupters in both government and private sector new they would be held accountable.

    Don’t let this case be a distraction from the structural corruption we have.

  • Barbbash

    If proving that Rajaratnam knew that the person who gave him the information was giving him illegal (insider) information (and of course that person would not have told him that), why is the SEC suing Rajaratnam, and not the person who gave him the inside information?

  • ThePope(the real one {really})

    The Justice Dept is never going to pursue the real rotten actors who corrupted the whole system by their campaign contributions that changed the laws that allowed them to make legal the actions that allowed the transfer of the wealth of our nation up to themselves and their cronies. They and the fifth columnists who came to head the regulatory agencies that were supposed to regulate them. This is a subversion of our system and is a treasonous act that harmed our republic beyond what any other terrorist act ever has. The Dept of Justice and FBI have been throwing all manner of red herring while the real criminals and enemies of the people go uncharged, unrepentent, and still unregulated. The enemies of the state include such big fish as Regen and Paulson, when they sit in jail awaiting execution for treason then I will believe that the justice department is not itself corrupted.

    • Dave in CT

      and Geithner and Bernanke and Summers….

      The Federal Reserve is an unaccountable private cartel that exercises more power than any institution in the US.

      Just look into it and think it over and look back at history.

      Well-intentioned or not, or switching between the two.

      There is no-higher puppet master.

      War and transfer of wealth schemes to enrich the elite, and dole out just enough to the sheep to keep the shearing civil.

      http://video.google.com/videoplay?docid=6507136891691870450&hl=en#

      http://www.lewrockwell.com/rothbard/rothbard66.html

      When you look at how vociferously many figures in US history fought the private Central Bank concept, with sound warnings about the effects and power, you don’t need to be a conspiracy theorist to be concerned and skeptical.

      Someday, if just for arguments sake, Tom needs to do a show on this. Could be his last.

      • Dave in CT

        Or, one could take the view that the above is the best that we can do. If so, we should be honest about it, and stop pretending we are free, and not beholden to elite masters who we hope have our best interests at heart.

        Just being honest about this, would at least bring those who defend it and those who don’t, onto the same page of a rational discussion/debate, and not the farce that is our puppet media discourse and 2-party charade we have today.

        Maybe we should just roll over and accept the China model.

      • RobertoG

        Example 1: A Democrat… Did anyone read how Harvard, at Larry Summers’ urging, when President, insisted in plowing nearly 2b of operating cash into hedges, etc. at the Endowment? All lost. Then he ran on to “manage” our Treasury. That this guy prob. has Asperger’s is not an excuse; but the Board made a really bad call putting him in charge, as did Mr. Clinton who gave him the keys as SecTreas. or Mr. Obama as “economic advisor” — what a crock! Even the liberal faculty at Harvard smelled a rat and kicked him out…). Now he’s back, with tenure, of course. Not to mention all that “consulting” income the sources of which those “academic” economists don’t want to disclose to be transparent about what might be motivating or influencing their writings…

        Example 2: A Republican… Hank Paulson. Go read his bio on Wiki — its pretty accurate and scary. If the “fictional” account in the new “Wall Street” film (Gordo Gecko II) is even 50% correct of what happened when the “13 Bankers” came baying to Paulson at Treas that August, it still is horrid (and I am betting it is more like 90% accurate…). Just one great quote from “Wall Street”: “Bulls make money. Bears make money. Pigs get slaughtered” — so let’s get the chutes ready and engage in a bit of eviseration (and their “piggy” banks, yachts, second/third homes, art collections, etc.)!

  • Eric M. Jones

    Haha-ha, Hoho-ho…you guys just don’t get it. There IS NO HOPE! The richest 1% own almost everything. See:

    http://www.periheliondesign.com/downloads/Wealth%20Distribution%202007%20update.pdf

    Oh Just wait until you see the glorious news for 2010! Keep those torches and pitchforks ready!

    • DavidG134

      Just make sure the gas tanks are drained in the private planes before you use them.

  • Barbbash

    Sorry — incomplete sentence, so meaning obscured. Here goes again:
    If proving that Rajaratnam knew that the person who gave him the information was giving him illegal (insider) information is the key to the case, and so difficult to prove, why is the SEC suing him, and not the person who gave him the inside information?

  • Rob in Key West

    My grandmom always asked me to tell guests a story about ethics:
    a young lawyer just hired out of law school had just been paid $50 cash by a little old lady for the codicil he’d made for her– his FIRST client.
    After she left he realized she’d given him two $50 brand new bills that were stuck together. So here this young lawyer was, faced with his first ethical dilemma– did he have to share the second $50 with his partner?

    • RobertoG

      I think the question should be: Should he run out the door to return the woman’s second $50 bill, or is she too far gone, and therefore, he needs to phone her or mail a check.

      “Have you stopped beating your wife yet?”

  • Roberto

    The “distraction” theory is out there in several places (Daily Beast, etc). Everyone should read “13 Bankers” — we still have not created a strong regulatory environment, and banking/finance separation ENFORCEMENT. We have stuff on the books, but the big fish NEVER get HOOKED!

  • Dave in CT

    As the guest says with high-frequency trading etc, activities that do nothing productive for our economy, and exist only as a technological challenge to game the market for free money, and threatening our economy along the way, SHOULD BE ILLEGAL.

    If the wealthy want the challenge of gambling amongst themselves, they should be free to organize trading/gambling “markets”, and play with their money. NO CHEAP FED MONEY, NO OPEN WINDOWS, NO BAILOUTS.

    Very simple. Make the law. Enforce the law. Stop letting Wall St. techno-scumbags use our institutions and OUR TAX $, to pursue their financial masturbations.

    • Philonous

      I tend to agree with your point here. The real problem is entities that are too large for anyone to have a grasp on. How can a democracy (read, the people) regulate operations like this? Few people, even experts in the field, understand the deals being done.

      • Dave in CT

        I don’t think the spirit of what we are talking about is rocket science. We make the law, and then find the cajones to prosecute it aggressively.

        We don’t need to become socialists, we don’t need to blame the market economy. We need to hold corruptors and colluders and well-meaning central planners that corrupt and collude and coerce “for the right reasons” in our economy accountable to the highest degree.

        • Philonous

          I’m not suggesting socialism. I just want real capitalism, not what amounts to an oligarchy.

          • Dave in CT

            I know, sorry Philonous, I didn’t mean you, just ranting generally there.

          • Philonous

            Ranting is good–it seems to be the natural response to this situation.

        • GeorgesGhostSpeaks

          BUT Dave — we do not make the law. They do. That is why they are innocent as the new driven snow. That is also why this is the only answer.

          http://www.youtube.com/watch?v=bO0-u900OG4

          • Dave in CT

            Of course they are making the law today. That corruption should be punished by life in prison or tar and feathering as well.

            We have no sense of accountability anymore. Too much distraction, and cynical acceptance of the status quo IMO.

  • Rich from Acton

    In Matt Taibbi’s Rolling Stone article about the lack of prosecutions in the Wall Street debacle he describes the revolving door relationship between SEC executives and Wall Street players. So many SEC lawyers and oversight execs end up working for the companies they are supposed to oversee or have previously worked for them that the resulting camaraderie among them is very discouraging of actual oversight.

  • Amy

    The caller who indicated that everyone at a party she attended was unconcerned with insider trading is exactly right. I have worked on or with Wall Street for twenty years, and the fact of the matter is that almost anyone involved with the market has always looked for that extra little piece of information that would make him or her a “winner”. None of this is new – what is new is that the rest of the world is finally catching on.

  • Joe in Philly

    I believe this is the first criminal case to come out of the SEC following the Great Recession and financial fraud. Isn’t it hilarious to see that the first (and perhaps only) guy to be prosecuted is the lone Indian trader. Where are all the indictments against the gamers who brought us CDOs and other derivatives and then traded these under false pretenses? And the CEOs and Boards that did not execute their fiduciary responsibilities? And the so-called independent credit agencies who clearly were anything but? What a joke!

    • Dave in CT

      The morally equivocating guest today sounded like he didn’t want to see any harsh penalties to come to all his fraternity brothers who went on to the investment banking world.

      • Joe in Philly

        Amen, brother Dave! The 800 pound gorilla in the room is the erosion of trust generated on both sides: the investment class and the regulators. Without solid trust, our (clearly) fragile system of finance is doomed.

  • An Aggravated Fund Lawyer!

    Tom: questions:

    1. how much of hedge fund performance has been the result of cheating???

    2. how long will investors stand by and let themselves be fleeced?

    Hedge funds have had a history of being scandal catalysts. Long Term Capital Management over leveraged itself and almost collapsed world economies in 1997. They spurred the huge mutual fund industry scandals in 2003. Then, they became the hotbed of ponzi schemes, large and small: Madoff being the biggest. Many of the largest Wall Street banks became essentially hedge funds, leveraging themselves up to 30 times, and almost collapsed playing the mortgage derivatives game. Now, we find them trading on inside information.

    I’m a hedge fund and mutual fund specialist and feel it’s high time to make the rigged game more fair. Recent regulatory changes are just a start.

  • RobertoG

    If the hedge funds are “pulling back” then the SEC actions might be having an influence, but the wall st. wizards are just resting while they think up the next device. I love the tiered-tax system for such financial profiteering — they make nothing of value, serve only the uber-wealthy, so why not grab high marginal taxes from them? If some of the “business” goes away due to “lack of fair profit incentive” (as the Blue-Bloods will shout), then fine. Go back to the toil of good asset allocation management, or go teach or fight fires or grow vegetables (though the “cheeky” Raj R. hardly looks like he knows what veggies are…)

  • Scott B, Jamestown, NY

    Tom, you misspoke, saying that the government couldn’t prosecute anyone for the 2008 Wall St debacle. The government CHOSE not to prosecute anyone. They, and the world, KNOW that Goldman-Sachs and others groups knowingly were selling bad paper, and betting against themselves in the derivatives market. The evidence has been laid out over and over for all to see. But not one person has gone to jail, not one law has been changed, and Glass-Steagall (that kept much of it from happening for decades) still isn’t back in place. There are a few low-rung people being prosecuted, but they don’t have the wall of high-priced lawyers, lobbyists, and former Goldmans-Sachs people in entrenched the government that Goldman-Sachs and those that caused the recession do.

    • RobertoG

      Again, some reading: “The Big SHort” (as well as “13 Bankers”) — we are not enforcing those who have benefited the most. Why? They are the same people funding the political races. Duh.

  • Bryan

    I don’t believe the SEC acts in the public’s best interest. How was it that they did 6 investigations on Madoff, and he was able to continue his scam for so long?

    • Philonous

      Perhaps it was fear of being fired for actually regulating.

    • Tina

      Bryan, Do you know HOW the members of the SEC are selected? Does the group change with each administration?

      • Philonous

        They are appointed by the president with approval from the Senate, and no more than three of the five commissioners can be of the same party.

      • Bryan

        “The Securities and Exchange Commission has five Commissioners who are appointed by the President of the United States with the advice and consent of the Senate. No more than three can be from a single political party. Each commissioner serves a five-year term, which are staggered so that one commissioner’s term ends on June 5 of each year.”

        • Dave in CT

          Good thing we have 2 parties!

          • millard_fillmore

            Nice sarcasm there, Dave!

    • Anonymous

      Another problem is that the SEC’s capability to respond has been crippled by the past years of ‘deregulation’. But, I agree with you that individual public servants at the SEC seem to also have dropped the ball or even ignored the signals that Madoff was a crook whose activities were illegal — even in the current situation of less strong regulations.

    • RobertoG

      Have read that too; SEC is beholden to fat cat bankers/politicos who make the decisions and control the fountain of PAC and Candidate contributions. There is inferior investment in a truly independent enforcement team. Not just SEC; take the IRS. They touted that 52,000 US taxpayers had Swiss accounts at UBS (one bank, one country; nil about all the other ones/territories which cater to this crowd). Yet, I have only read that about 3-4,000 of these have either been prosecuted or voluntarily came forward. Does that mean the other 48,000 were all forthright and documented their off-shore income/earnings?? Remember, they may have other accounts elsewhere, and there are no doubt many other US filers at other banks/countries; perhaps the IRS should self-fund its operations as a “for-profit” corp and hustle a few more of the cheats to guarantee investment in staff, etc. Rather than sit hostage to our sniveling reps and sens. in DC…

  • Anonymous

    Raj Rajaratnam needs to hire the Monitor Group to help his image.

    • RobertoG

      They are tied up right now, re-polishing their own…

  • Dave in CT

    Small Handful?

    They took down the US economy.

    If they are a small handful, they should be in prison for life.

    If a small handful can take down the whole economy, we lack some serious basic law, or perhaps political will to prosecute.

  • DavidG134

    A or A- on companies being ethical?

    Keep up the attempt at the propaganda.

    But I want to let you in on a secret, it’s no longer working on us.

  • Dave in CT

    Audit the Fed.

    Fed>Banks>Wall St.>Bubbles for elite profit. Blame the “business cycle” and repeat.

    US economic history in a nutshell.

  • God23

    Tom: Your guest stated “I don’t know how to measure ethics.” Don’t do things to other people that you wouldn’t want them to do to you. That is how you measure ethics. This includes cheating them by coercive acts done in the privacy of your office.

  • Lynne Rosa

    Please stop being an apologist for these crooks. The SEC failed! Stop saying they did not. Let’s tell the truth – insider trading helps??? Give me a break.

  • Webb Nichols

    Treat white collar crime as abuse and betrayal of fairness, ethics, trust and violation of all unknowing and well intentioned people who believe in what the democratic process is to insure.

    These crimes must be seen in their long term import and prison sentences should reflect that circumstance.

    Unfettered capitalism is an invitation for corruption, abuse, greed, avarice, exploitation, manipulation and there is no reasonable argument for letting such a situation to exist.

    • Dave in CT

      Before we throw out free markets where people decide for themselves what things are worth to themselves and buy/sell accordingly, creating organic supply/demand markets and preserving liberty, can we first try condensing your statement to:

      “Failure to prosecute white collar crime is an invitation for corruption, abuse, greed, avarice, exploitation, manipulation and there is no reasonable argument for letting such a situation to exist.”

      True free market people believe in the Rule of Law, not anarchy.

  • John

    Any chance the regulators can be investigated, from what i understand not even one regulator has been considered a part of the problem, and please quit calling the middle class little people.

    • ThresherK

      “But they are ants, John, they are!”

      The erstwhile middle class are being lumped into the same “Wall Street doesn’t give a crap about” barrel as the farmers in midwest.

      I LOVE the term “little people”. It reveals the ignorance and disdain those people who actually use it (non-ironically) have for the rest of us. If someone thinks sitting at home with a TV-advertised stock trading service lets them “compete” on a “level playing field” with these uberlords…

  • Dave in CT

    Tom has great attitude today. Thank you.

  • Michael

    Gregory Zuckerman seems to be making a bunch of false Analogies about what’s going on.

    Just listen to him right now at 48min into the hour. Sounds like a apologist to me

  • Dave in CT

    Corruption and Lack of Accountability. That is what outrages Americans.

  • KE

    So he goes to a minimum security white-collar crime jail and plays golf for a few years – it’s certainly worth the money he made and makes no example of him for those other aspiring crooks on Wall Street.

    Now if he were to:
    a) Go to the maximum security prison (that a bank robber that stole 1/100th of the money he made would go to) so that he can keep company with rapists and cut-throats
    b) Lose all of his assets and have all of his family’s assets confiscated (good old Roman practices :-) so that his family ends up living in the poor house
    then just maybe the fear of God could be put into these scoundrels.

  • Philonous

    People who believe in the “free market” frequently use reverential language about Adam Smith, but they obviously haven’t read him. He wanted an economy in which buyers and sellers knew each other well and could come to a fair price between them. Now we have multinational corporations and financial instruments that are opaque. A return to genuine capitalism is what we need.

    Greg Camp
    Springdale, AR
    http://gregorycamp.wordpress.com/

  • Eddie in Rutland

    Are the “rich” insider traders working for the companies that manage my mutual funds? Are they trying to maximize their funds returns so I will buy more? If so, am I benefitting?

    • RobertoG

      Are you saying the Vanguards and Fidelitys do this? I am only wiht the large, very low fee funds, and would be surprised. But perhaps I am naive… Putnam was; got their wrists slapped. But “plain vanilla” mutuals were not in this “game” or so I thought..

  • Johnpenf

    no one can point out HOW insider trading hurts other investors, is it unfair yes, but what do you NOT have that you would otherwise have had as a result of insider trading. that these types do better than you or I, they take nothing from us. The actual insider, yeah nail them to the wall. The guy that buys that information, nail him to the wall. This is of course what the SEC is going after. Funny, though, no one is bothered when congress does it (note that they beat the market by even more than the best hedge funds)

    • URaDupe

      Have you not noticed the recent financial collapse of the banking system. The richening of the rich and the poorering of everyone else. It was all insider trading of the most heinous type, just called other things like deregulation, unleashing the capitalist might of our nation and other bull.

    • RobertoG

      uhh. 25% more in my 401k?

  • Jim Bob

    When will engineers and scientist are paid given similar salaries/incentives, the smart and money savvy people will move away from wallstreet. Until then, engineers/scientists will move into money. Its all about pay! Engineers/scientists don’t make wallstreet money!

  • Dave

    Income inequality, investment opportunity inequality resulting from insider trading. And fewer companies may even be going public. That also will add to the opportunity inequality since only the connected will be able to invest in the increasing number of companies that remain private.

  • Dave in CT

    If we aren’t going to prosecute, we need to tar and feather.

    Bag of pot, in for 20.

    Ruin the economy, go to golf jail.

    • DavidG134

      They don’t even go to golf jail anymore.

      Corruption is the system in America.

  • Jim Bob

    When engineers and scientist are paid/given similar salaries/incentives, the smart and money savvy people will move away from wallstreet. Until then, engineers/scientists will move into money. Its all about pay! Engineers/scientists don’t make wallstreet money!

  • Dave in CT

    We need to keep these programs coming Tom till we have the perp walks.

  • Patrick

    Nobody wants to be Bud Fox…they want to be Gordon Gekko!

  • Michael

    “Eddie in Rutland Just now

    Are the “rich” insider traders working for the companies that manage my mutual funds? Are they trying to maximize their funds returns so I will buy more? If so, am I benefitting? show more show less ”

    It’s likely, Most MF outsource pieces and duties to mutiple companies

    For example your MF may have given pieces to BOA,GS,MS,SS, without your knowledge and in return those same companies will outsource pieces to other companies with the even your MF being aware of this.

  • Mike

    We don’t even need the SEC at all – should be obvious they are not good for the task at hand.

  • Yar

    I live in a town where a few business men made money by burning their businesses. My Grandfather once noted that they all died young. Breaking the law or being unethical eats at your soul. Life is too important to sell it for money.

  • Glenn K.

    Size Matters. The larger the institutions, the bigger the bank accounts, the more complex markets and trading become, the more difficult it becomes to wrap our minds around how it all works, how to manage it all, how to regulate it all.
    Compare this to the other extreme, such as the Amish, who not only eschew technology beyond hand made (as for which they are well known) but also of simple direct face to face social structures.

    • Dave in CT

      Tar and Feather in south Manhattan would be pretty face to face.

    • RobertoG

      Glenn, sorry to break into your reverie, but wasn’t some Amish Ponzi guy just pilloried on NPR?

  • Dave in CT

    If what happened isn’t illegal yet, make it illegal. Punish malefactors, and otherwise leave us alone.

  • Anonymous

    More regulation of the financial markets is needed. Some of the changes to SEC regulations made by Republicans in the name of ‘deregulation’ reversed good controls enacted in the 30′s. Also hedge fund managers should pay a much higher tax rate than 15%. Perhaps increase the tax rate on capital gains to 30% would solve a wide variety of these problems and help reduce the deficit.

    • RobertoG

      Here, Here! That “carried interest” exclusion is like a free ride on a rocket. How can that possibly be justified when the VC and PE guys take that home each year as basic income. What a crock!

  • DavidG134

    David Zuckerman go back and tell your Wall Street Masters that they will be held accountable for their destruction of our economy.

    • DavidG134

      meant Gregory Zuckerman

    • Ecourpas

      What about the fact that US congressional and senatorial staffers can legally use information, insider information, on government contracts, etc. to profit from in their own stock purchases or sales.
      I find this a reprehensible example that our Federal Government presents(colludes) to(with) the private sector

      • DavidG134

        It is a fact Washington elected officials and staff profit from inside information. Their year after year stock returns have been documented at over 10%. Well above what the person without the information could possibly get.

  • brookezen

    What about the fact that we sold the stock market to Germany?

    • DavidG134

      Tax the transactions. Make the Germans pay. Ha Ha.

  • Glenn K.

    But it’s really all of us. It’s really part of human nature. This goes right to the point between naked urge and stepping back to get perspective. Greed isn’t just running loose by big power brokers on wall street. It’s a culture wide challenge. It’s everyone who took out a loan that was “interest only” etc. if they had even an inkling that something was wrong with that. Thinking that a house would continue to rise in price and they could just borrow against that and spend the “free money.” We are all very tempted to want something for nothing. It’s insidious. This is why states have lotteries that keep churning along. Sure, it doesn’t make sense when you think about playing it. It’s an emotional motivation that takes over.

    • RobertoG

      Well then Human Nature needs to be changed; and paying the price for “bad behaviour” is a great place to start.

      “Getting all we can” is just the sort of warped thinking behind why US buys 40% of the world’s oil — not just to heat, but to drive our SUVs, manufacture all our furniture/appliances and energize all our flat screens for our increasingly larger homes. This mindset is why China owns our Treasury and Trade Balance. I know plenty of people who live like we do, and none of us understands the other animal that lives way over their heads. We live plainly, volunteer lots, and are active in Town Government/committees. This is what my wife/I were “taught” while growing up. Where are the other 90% of the masses getting their “life” guidance?

      Let’s throw a whole bunch of the crooks in jail — set a new momentum for hard work/fair play. For starters, prosecute R. Gupta and L Blanfein instead of “inviting” them to help the prosecution of a two-bit hedge fund guy. Go hard against lots of mortgage brokers (Countrywide, Household, etc) who are directly tied to folks they duped into bad mortgages — find some fraud law and prosecute for misrespresentation of “goods” they peddled?!

      I am pretty pissed off that my 401k got hurt so badly — and no one is paying for this, so it is going to happen again. And again. Where the heck is the backbone of our nation? The Tea Party may be a bunch of hotheads, and goaded by the elite to distract others, but I share the sentiment that our nation is running amok and politicians and elite business leadership is not doing anything about it.

      • Dave in CT

        “The Tea Party may be a bunch of hotheads, and goaded by the elite to distract others, but I share the sentiment that our nation is running amok and politicians and elite business leadership is not doing anything about it.”

        Exactly. Call out the Tea-O-Cons (Neocons hijacking the Tea Party sentiment), refute the social conservative/religious sentiments that are irrelevant and illiberal (in the liberty sense), and keep the heat on!

        Be a Better Tea Party.

  • Zeno

    They said they couldn’t morally make a cost/benefit analysis for insider trading, and then…just minutes later states that the government has to make a cost/benefit analysis for the prosecution of insider trading.

    Hey money man…You just proved that you were lying!

    …and THANK YOU Tom!, for trying to pin this guy down on how the little guy is forced into losses on Wall St., but does not necessarily reap any gains. Even people who had absolutely no investments of any kind had losses when they brought down the world economy.

  • Rickh0712

    This isn’t limited to hedge funds. When companies stand to profit or lose, they will not weigh whether it is legal or not. Many weigh if the risk, the cost IF caught, is worth taking. Most times, it is if you will make millions while fines would be a fraction.

    The industry is out of control. Stronger laws only make them more cautious. It isn’t an accident most corps will have a legal dept that holds most power. Until we change the definition of profit, less about more money, more to do with stable growth, great workplace, good to environment, etc with each giving better tax incentives….this will continue.

  • Raht_Ketusingha

    One of the guest speakers mentioned that ethics was changing. But, the fundamental rules of good and sound conduct –such as: one should not cheat, lie, nor hurt other or kill lives–are still holding. Obviously, inside trading hurts many members of the economy.

    When one of the guests mentioned the use of cost-benefit analysis, he was not clear about the costs to whom and the benefits for whom.

    Most economists already use concepts of “social” costs and “social” benefits. This is where, in short, the costs to and the benefits for everyone in the society are considered. Someone’s gain is usually someone else’s lost or cost. Simple cost-benefit analysis, where the cost to an individual and the benefit for an individual, is not useful nor appropriate in this discussion on inside trading.

  • Zeno

    I think people are upset that the Investment Banks forced a loss upon them, by using their assets for their gamble. The reason there are not prosecutions for losses in Las Vegas is that everyone who gambles there is doing so with their own money and at their personal risk.

    The guests seemed so morally bankrupt that they did not even understand this simple concept!

  • Hiya

    Even in Russia all these bastards would be sitting in jail. A Putin is never around when you really need him.

    • LtP

      From what I’ve heard had this occurred in China they’d all be shot on public television and their vital organs sold to rich Americans (like Charlie Sheen?)

  • Checkerives

    To all who support insider trading: go and live in a country that does not follow the Rule of Law and THEN decide whether it is a good idea to break the law by insider trading. There is no freedom without respect for laws. Financial gain has no value when one sacrifices personal and civic integrity. We are all in this together and those who break the law must bear the consquences. I am disturbed and confused by the vascillating and contradicting comments of Mr. Zuckerman.
    Thank you Tom for holding fast to good values.

    • Joanne

      I am so surprised that more listeners haven’t spoken out on the prof. from Boston ( I presume Harvard). If he is serious, as I surely know he is, then we as American’s are in big trouble. I wish there was an uprising against him so he could lose his job & the school be forced to teach REAL ETHICS>

  • Hank D.

    Great to hear your voice Greg. Good show, Tom, you have a steady listener here. Arthur, I agree with your principals but they do do reflect reality as I hope I expressed on the show. Hopefully there will be more dialogue on this issue going forward and some real enforcement not just more absurd pseudo-law out of the Frank and Dodd Show. And Arthur, I was not kidding.

    • Hank D.

      Arthur (and Tom)- I have said the following to Greg via email:

      The truth is that I discuss business ethics with my students in a manner that makes it very real and “harsh light of day” for them, saying that they will be tempted but to be incredibly careful about what they do.

      The ethics courses given in the MBA programs are generally worthless as far as I can tell and are taught by mealy-mouthed social scientists with no “real world” experience. The students pass them off as less-than-credible.

      My belief is that people learn ethics from their parents, families and friends… and later on from the people they work with day-to-day and not in an MBA program environment. Ethics are granular and are shown by actions not book lessons. And the “banking crisis” certainly enriched an awful lot of people who will never suffer any punishment.

      • JohnDoe

        Hank, I love the last para — I point these things out when the situation arises with our kids (well, a “found item” not insider trading!). I tell them what games others play. I often use this example: how would you feel if an NYT or WSJ writer put your last decision/action into front page article? Would readers think you did right, or wrong? Etc.

        It starts at home. Teachers and mentors along the way feed the brain with guidance. By the time they are MBA candidates, it is not exactly too late, but one suspects the human nature is hardening already. But, like you, I think many MBA profs are not familiar w/the real world. I have two great examples (not MBA; normal college/liberal arts) and both profs. completely failed the smell test, despite them being such “luminaries” on campus.

        Finally, the recent Economist convention resisted discussion of this very type of thing vis a vis their own grantors and the potential sway on “research” — how an Economist can take significant $$ and support from a bank and then say they had “complete independence” when analyzing a banking situation is utter bs.

  • Hank D.

    correction: should have read “… your principals but they do NOT reflect reality…”

  • GeorgesGhostSpeaks

    How long would you sit in jail for a hundred thousand dollars a day? I guess after a couple years I would apply for work release.

  • laager

    Good job, Tom. You had a fire-in-the-belly indignity I enjoyed and thought well spoke. Particularly the line, “…being herded to here.”

    That is the greatest indignity of all–there rarely being off-network, corporate-free lifestyle choices.

    Tulip-mania and our herd behavior of mob-think combined with marketing have made most working people wage-slaves to the Corporation. That no crowds formed in Washington to protest a Supreme Court decision making Them our legal equals, whispers our timidity.

    I took “The Glory and the Dream” off the several weeks ago and it seems as through two generations of “trickle-down” propaganda, and the death of all people with memories of those hard-earned rights, the Other-side is now ascendant with the simplicity of duping us by pointing a finger at our neighbors, implying they get a better deal at your expense.

    The 5% must be ROTFL.

    laager
    Walla Walla, Washington

  • twenty-niner

    We need financial regulations, but simple regs that a child could understand and don’t require a forensic accountant to enforce. Having to put 10% of your own money down on a house could’ve prevented the entire housing bubble and subsequent depression. Without a housing price bubble, there’s no MBS bubble, and no derivatives bubble.

    Further, if the Fed hadn’t flooded the financial system with cheap money after the collapse of the tech bubble, interest rates wouldn’t have gotten ridiculously low (which would’ve been good for savers), and housing prices would’ve remained stable, climbing at basically the inflation rate, the historical norm.

    • Dave in CT

      Were there any politicians we could have voted for over the last 20 years that would have enacted that vision?

      • twenty-niner

        Ron Paul for one. Not that I agree with all of his positions, in my view, he gets a lot of stuff right.

        • Dave in CT

          That’s the best conclusion I have been able to draw as well….

  • GodAllMitey
  • Anonymous

    Not only is there the technical problem of HF Trading, but we also have to stop The Hill exemption that does not penalize the Elected Representatives & many staffers for insider trading.

    HF trading profits must be taxed @ the trader/brokers’ rate as regular income. Hedge fund mgt. partner profits must also be taxed as regular income.

    Capital gains taxes should not kick in for any security not held for at least 5 & preferably 7 or 10 years before sale. For a profitable future we need to minimize the Quarterly Profit Pressure on publicly traded companies. We must also penalize those who off-shore jobs & examine all Corporate Welfare from the DOD & its criminally poor bookkeeping/accounting practices right down the line.

    We must also have the Fed audited. Its behavior, especially in the “bailouts” is NOT acceptable

    Most of all DOJ, SEC, CFTC & Treasury need to be fully funded by taxes on trading transactions so that political influences on enforcement can minimized.

    The same type of regulatory funding should be appropriately funded in areas such as the FDA, DOA, FCC, etc. so that all enforcers can have some insulation from those they regulate & Hill & WH pressure.

    • Dave in CT

      If HF trading serves no purpose except technologically rigging the market to one’s advantage, it should be illegal, as long as that market is tied to our economy. Any “liquidity” arguments are pure BS at this level. If they want to set up a private, high-tech gambling lounge, all the power to them.

    • Hank D.

      Keipp99: you hit the nail on the head about the Elected Representatives and staffers. It is exactly what I was getting at when I called in for the last ten minutes of the show. It is an outrage that they are allowed to get away with this “special priviledge” to commit an activity that the rest of us are disallowed from… but they will say “we are above that type of evil activity”… I don’t think so and believe that all the Congress and staffers should be extensively audited going back 20+ years and be required to forfeit their gains plus interest.

      Tom: there ought to be a show covering exactly this topic while it is hot. The Congress and staffers get away with highway robbery… and it’s time they were punished and the activity disallowed…. but I didn’t have the time to go in it on the show.

    • twenty-niner

      All good suggestions.

      How about auditing every congressman who voted for H.R. 1424 (TARP):

      House:
      Democratic 172 Yeas, 63 Nays
      Republican 91 Nays, 108 Nays

      Senate:
      9 Democratic Nays
      14 Republican Nays
      1 Independent Nay

      http://clerk.house.gov/evs/200
      http://www.senate.gov/legislat

  • mary sue

    good show as usual. One comment though. Tom, you are not a ‘little person’. Nor am I. None of us are. We are American citizens of less than top 1% income. Please don’t use this language. It perpetuates the idea that we are less than, and therefore it is OK to use whatever means to take our attempts at financial security.

  • Markus

    It is staggering that no one has gone to jail for this. And it’s nearly as bad that the legislators on both sides of the aisle are still in power who are responsible. Oh and let’s go further, our president puts in charge the same gang that got us into this.

    We’re not gonna make wall streeters feel badly about this. Our president will eventually move on. But just to dream for a minute, term limits for congress would certainly reduce the need for them every year to scrounge up another few million to get re-elected. Course, they’ll allow that when Gaddafi volunteers to leave.

  • Hank D.

    There were Congressional representatives who purchased shares and options in BofA, Citigroup and other financial institutions during the worst days of the crisis. Some made these investments with a public announcement and some did not.

    The rationale for making the public statement has some interesting legal implications. The stated reasons for the purchases were to “encourage confidence in the banking system”…. but these individuals all had some role particularly as Senate/House leaders and as Committee members in creating and implementing the outcome… and they did not make these investments in order to suffer losses either.

    Even a modicum of homework will reveal some of the DC people who did this… and it’s time for some investigation and restoring of honesty and integrity into the system as the trust is almost completely gone. Start with Frank, Dodd, Pelosi, Schumer, Reid and then move onward to some of the Republicans. They were all a part of this “investment club”.

    • JohnDoe

      This disgusts me. Instead of putting our heads further into the sand come November, I urge people to vote for ANY (half-way) decent NON-Incumbent. Many Mr/Ms Smiths should go to Washington…

      Frank, who gigged the Fannie/Ginnie Maes; Dodd, who did not even know he took a loan from Countrywide, etc. etc.

    • JohnDoe

      SO, Tom, can your staff do this? Pass it on to another part of NPR?

    • Anonymous

      I like the idea of sum full and impartial investigation into this and the idea of throwing all the politicians that have become to in kind with lobbyists and Wall Street. The difficulty of this is that it seems partisanship cannot be removed as your post and some of the replies to it reveals. Trying to assign all the blame to Democrats with maybe an afterthought for Republicans. The whole miss did not happen when Obama took office, it happened during the tenure of G.W. Bush who tried to end or hamper regulatory oversight in every part of the American economy and basically told Wall Street go out and make money for yourselves guys. Sure investigate Pelosi, Reid, Dodd, etc. But also investigate the Republican congressman and senators that were in charge when this all to started.

      • Ltp

        > it happened during the tenure of G.W. Bush who tried to end or hamper regulatory oversight ..

        Everyone listening to this should get a copy of “Serpant on the Rock” and check-out the last chapter where ‘W’ Bush is mentioned at a convention of Pru-Bache salesmen in NYC – ESPECIALLY what is said by one of the salesmen in-front of ‘W’ while he was Governor of Texas.

        You can buy it online from Amazon for as little as $2 – but it’s a LONG read!

        According to the author: President George HW Bush appointed a friend as SEC Commissioner and when the various state’s Attorney Generals began investigating Pru-Bache’s fraudulent ‘limited partnerships’ – the SEC Commissioner ordered his staff not to cooperate with the state AGs thereby giving Pru-Bache’s criminals time to cover their tracks AND hook even MORE thousands of trusting (aka ‘gullible’) senior citizens into handing over their retirement savings.

        BTW: At the same time Bush ‘Junior’ was involved with Pru-Bache execs in forming a LP to sell seniors part of his Texas Rangers baseball franchise.

        Read the prologue to the book here: http://www.businessweek.com/chapter/chap0003.htm

        Here’s where you can buy it (I have no financial interest in any sales – only an interest in ‘justice be done’)
        http://search.barnesandnoble.com/Serpent-on-the-Rock/Kurt-Eichenwald/e/9780767923842

        Twenty years later even the names haven’t changed – just the amount of money bilked by these ‘licensed investment professionals’ (UPWARD!)

        Now I understand WHY the US Govt makes it so difficult for ‘Joe Six-Pack’ to invest offshore or gamble online – they’re shilling for their theiving friends here.

    • Anonymous

      I like the idea of sum full and impartial investigation into this and the idea of throwing all the politicians that have become to in kind with lobbyists and Wall Street. The difficulty of this is that it seems partisanship cannot be removed as your post and some of the replies to it reveals. Trying to assign all the blame to Democrats with maybe an afterthought for Republicans. The whole miss did not happen when Obama took office, it happened during the tenure of G.W. Bush who tried to end or hamper regulatory oversight in every part of the American economy and basically told Wall Street go out and make money for yourselves guys. Sure investigate Pelosi, Reid, Dodd, etc. But also investigate the Republican congressman and senators that were in charge when this all to started.

  • Anonymous

    your guest said, ‘It is not as clear cut how the individual investor gets hurt from insider trading?’
    What is this DoubleSpeak world we live in? the sky is magenta! the sky is magenta!
    Try immorality (stealing) does hurt people- that is why we send so many of our poor people to jail for stealing a dvd from Walmart.
    ah, what do I tell my kids about this world I have brought them into???

  • Zeno

    So could the people of the united states simply declare a “no confidence” in the Congress, and then just elect new representatives ignoring the ones that are already there, declare a new capitol building and location…How about Philadelphia?

    Is there such a thing as a recall/no confidence vote for the entire government? It would be an interesting exercise to see who is really in power.

    Another good movie to see is: Casino Jack and the United States of Money.

  • http://www.facebook.com/people/Eugenia-Renskoff/650552672 Eugenia Renskoff

    Hi, Just like the mortgage subprime/mortgage fraud crisis, no one has gone to jail for this. The great big question is: WHY? What has to happen for these people to get punished like they deserve/ Eugenia Renskoff, NY

  • Pfcohen

    One major problem is that the financial journalists who cover the industry are either way behind the curve as far as understanding the way the game is played or they are invested in maintaining their sources and in so doing they become complicit in the crime by ignoring the problems or doing the bidding of their sources. Access obscures their moral imperative of these reporters.

  • LtP

    Here’s an (not so novel) idea. Since these guys are ‘suspected’ of making profits through commission of felonies – why not charge them with ‘suspicion’ and seize all their assets under the Civil Forfieture Law?

    That’s what some police departments are doing along I-95 and I-10 to law-abiding drivers (from out of state).
    http://www.fear.org/

  • LtP

    Here’s an (not so novel) idea. Since these guys are ‘suspected’ of making profits through commission of felonies – why not charge them with ‘suspicion’ and seize all their assets under the Civil Forfieture Law?

    That’s what some police departments are doing along I-95 and I-10 to law-abiding drivers (from out of state).
    http://www.fear.org/

  • dw

    The only difference between allowing insider trading and not allowing it is who gets hurt when the price drops. If you want the insiders to share the hurt with the other public shareholders keep insider trading illegal. If you want the insiders to be able to sell their shares prior to the real drop and not get hurt make it legal. The price may drop a bit on sales by insiders but the real drop occurs when the information becomes public.

    All the shares outstanding of a company are owned at all times by somebody or entity. If a sale occurs on material nonpublic information someone must buy those shares. If there are 100 million shares and the price drops from $50 to $30 when the public news announcement comes out then $2 billion in market value is lost. That is inescapable. The only question to decide is who suffers the loss. Letting insiders trade on material non public information only lets them avoid the majority of the loss by transferring shares to other unsuspecting people/entities before the drop. Where is the social benefit in this? How can this be debatable whether this is harmful to the public at large? Insiders would clearly benefit at the expense of general investors.

  • http://twitter.com/RealChrisSong Chris Song

    Is Greg Zuckerman a Wall Street apologist? I was struck by his waffling and fence sitting during the show. There were times he was essentially DEFENDING the behavior of those engaged in illegal financial activity. His moral reflexes often demonstrated the attitudes of one steeped in the Wall Street easy money ethos. I don’t like him.

  • Marka

     One down! Many more to go!!

  • P90321p

    Contractarian malfeasance runs amok, and Congress cashes in – how insider trading is fueled, maintained, and encouraged by those with presumed authority, and judicial collusion.

ONPOINT
TODAY
Apr 18, 2014
Russian President Vladimir Putin speaks during a nationally televised question-and-answer session in Moscow on Thursday, April 17, 2014. President Vladimir Putin has urged an end to the blockade of Moldova’s separatist province of Trans-Dniester. Trans-Dniester, located in eastern part of Moldova on border with Ukraine, has run its own affairs without international recognition since a 1992 war. Russian troops are stationed there.  (AP)

Deadly clashes in Eastern Ukraine. A white supremacist rocks Kansas City. The Marathon bombing anniversary. And Bloomberg on guns. Our weekly news roundtable goes behind the headlines.

Apr 18, 2014
This undated photo provided by NASA on April 2, 2014 shows Saturn's moon Enceladus. The "tiger stripes" are long fractures from which water vapor jets are emitted. Scientists have uncovered a vast ocean beneath the icy surface of the moon, they announced Thursday, April 3, 2014. Italian and American researchers made the discovery using Cassini, a NASA-European spacecraft still exploring Saturn and its rings 17 years after its launch from Cape Canaveral. (AP)

Oceans in Space. The new discovery on a moon of Saturn, and the possibility of life there.

RECENT
SHOWS
Apr 17, 2014
Ultra-Orthodox Jewish men burn leavened items in final preparation for the Passover holiday in the ultra-Orthodox Jewish town of Bnei Brak, near Tel Aviv, Israel, Monday, April 14, 2014. Jews are forbidden to eat leavened foodstuffs during the Passover holiday that celebrates the biblical story of the Israelites' escape from slavery and exodus from Egypt. (AP)

In the week of Passover and anti-Semitic gunfire, we look at the history of the Jews with acclaimed historian Simon Schama. Plus, Pope Francis and the Catholic Church today.

 
Apr 17, 2014
Students cheer and wave as President Barack Obama, not pictured, exits the podium after speaking at the University at Buffalo, in Buffalo, N.Y., Thursday, Aug. 22, 2013, beginning his two day bus tour speaking about college financial aid.  (AP)

The inside dope on college financial aid. The way it really works, who gets what, and how.

On Point Blog
On Point Blog
Some Tools And Tricks For College Financial Aid
Thursday, Apr 17, 2014

Some helpful links and tools for navigating FAFSA and other college financial aid tools.

More »
Comment
 
How Boston Is Getting Ready For the 2014 Boston Marathon
Tuesday, Apr 15, 2014

Boston Globe metro reporter Maria Cramer explains how the 2014 Boston Marathon will be different than races in the past.

More »
Comment
 
WBUR’s David Boeri: ‘There’s Still Much We Don’t Know’
Tuesday, Apr 15, 2014

WBUR’s senior reporter David Boeri details the ongoing investigation into the alleged Boston Marathon Bombing perpetrators.

More »
Comment