SEC and Other Investigations of Illegal Trading
- setyoustraight
- Normxxx
- setyoustraight
- Kirk
- setyoustraight
- Normxxx
- setyoustraight
- Normxxx
- setyoustraight
- SteveT
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» setyoustraight - Re: Re: Re: Justice is a joke in this country
In response to message posted by Kirk:I think they set aside $4.95 billion because they know we live in a world where the deep pocket is the first place that people hoping to evade responsibility will try to assign blame.
I think they set aside $4.95 billion because they know that the people hearing a civil case are more likely to treat the affair as one giant lottery ticket instead of a forum for justice.
Regardless of ANYTHING that Jack Grubman and the brokers at SSB may or may not have said to the investing public, even WITH Sullivan and his team of shady accountants, an outsider could see that WorldCom was an awfully speculative bet on continued growth in the telecom sector. The people who bet on WorldCom bet wrong. Now they want Citi shareholders to cover their losses.
"Justice is a joke" indeed.
-- posted by setyoustraight
» Normxxx - Re: Re: Re: Re: Justice is a joke in this country
In response to message posted by setyoustraight:Ah, but those investors were betting that WorldCom was 'too big to fail.' They got sandbagged by the system and now want their money back. After all, isn't this a 'no-fault' economy, where risk is limited but rewards (at least for the few and the lucky) are not?
-- posted by Normxxx
» setyoustraight - Re: Re: Re: Re: Re: Justice is a joke in this country
In response to message posted by Normxxx:Their risk was limited. None of them lost any more than what they elected to invest in WCOM.
-- posted by setyoustraight
» Kirk - Re: Re: Re: Re: Re: Re: Justice is a joke in this country
.In response to message posted by setyoustraight:
You seem to be making an argument that the con men who rip you off don't deserve jail time either. After all, you only handed over cash to them for their "lies" that you could afford.
Look. You are starting to sound like a crooked hedge fund operator who believes it is OK to get whatever you can from people as long as you don't use a gun.
FWIW, I believe you need to be honest with people or go to jail if caught delibertly lying with the intent to trick them out of their money.
There is no law against having a crummy business plan so silly law suits that go after crummy CEOs should be tossed out, but a CEO or other insider who doctors the books to TRICK investors should go to jail. PERIOD.
If you have an investment bank or accounting firm that took money to help people break the laws... even worse because you are trusted by others paying you money to watch out for them!
-- posted by Kirk
» setyoustraight - Re: Re: Re: Re: Re: Re: Re: Justice is a joke in this country
In response to message posted by Kirk:A "crooked hedge fund operator"? That's awfully harsh talk coming from a fat doofus hustling a two-bit newsletter.
I didn't think there was any question about who the crooks are in the Enron and the WorldCom scandals. People are being prosecuted. People are doing jail time. Sullivan, Ebbers, Skilling, Lay, and Fastow are having or have had their dose of the criminal justice system.
Citigroup, on the other hand, did not doctor up Enron's books. Nor did they book billions of dollars worth of expenses as capital expenditures for WorldCom. They took a multi-billion dollar hit on their holdings, but AGAIN, because they have the deep pocket, the lawyers will be all over them.
-- posted by setyoustraight
» Normxxx - Re: Re: Re: Re: Re: Re: Re: Re: Justice is a joke in this countr
In response to message posted by setyoustraight:Boys! Boys! Fight clean! <img src="http://www.geocities.com/gofmd/biggrin.g...">
setyoustraight-- I suppose you think the words fiduciary responsibility are an oxymoron when applied to brokers or bankers?
"In the handling of money and when one acts as a corporate or individual trustee, there is a fiduciary responsibility owed to the principal party. It is defined as a relationship imposed by law where someone has voluntarily agreed to act in the capacity of a "caretaker" of another's rights, assets and/or well being. The fiduciary owes an obligation to carry out the responsibilities with the utmost degree of "good faith, honesty, integrity, loyalty and undivided service of the beneficiaries interest." The good faith has been interpreted to impose an obligation to act reasonably in order to avoid negligent handling of the beneficiary's interests as well the duty not to favor ANYONE ELSE'S INTEREST (INCLUDING THE TRUSTEES OWN INTEREST) over that of the beneficiary. Further, if the agent should find him/herself in a position of conflicting interests, the agent must disclose the dual agency (acting for two parties at the same time) or risk being accused of constructive fraud in regards to both or either principals.
[Normxxx Here: Such as acting as a seller of securities for a company and touting them for purchase by an investor/client. ]
"The principal is sound but has limited exposure to the fields of financial planning, real estate, securities or life insurance since it is rarely taught in any pre-licensing courses nor as part of continuing education courses as well. Even ethics codes from major organizations have avoided the fiduciary issue since membership did not want to commit to the apparent extra legal exposure."
-- posted by Normxxx
» setyoustraight - Re: Re: Re: Re: Re: Re: Re: Re: Re: Justice is a joke in this co
In response to message posted by Normxxx:"Fiduciary responsibility" is not a blanket liability policy. Kirk and others have insinuated that Citigroup actively participated in the fraud that took place at WorldCom. I am hard pressed to understand why an outfit like Citigroup would leave multiple HUNDREDS of MILLIONS of dollars exposed to WorldCom if what they were really doing there was actively aiding and abetting a fraudulent accounting scheme.
-- posted by setyoustraight
» Normxxx - Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Justice is a joke in thi
In response to message posted by setyoustraight:Well, I agree with you there-- no bank could be so thick. But they sure as hell were engaging in the duplicitous actions of touting stock they were selling for companies into the market (as investment bankers) to their brokerage clients, regardless of what they personally thought of the stock. So much for "good faith, honesty, integrity, loyalty and undivided service of the beneficiaries interest."
-- posted by Normxxx
» setyoustraight - Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Justice is a joke in
In response to message posted by Normxxx:I have always thought that the "Chinese Wall" solution to this conflict of interest was, at best, haphazard. However, it creates another problem that may or may not have taken place at Citigroup. So let me entertain a purely speculative situation.
The "Chinese Wall" arrangement is intended to separate the investment banking and research sides of an investment house. Its existence is supposed to keep the research side of the house from issuing bogus "buy" recommendations based upon whatever underwriting deals the other side of the house might be chasing down. That "Chinese Wall" could just as likely act as a dam for information, especially negative information, between the two sides of the investment house. If I run the underwriting side of the house and I find a candidate for my investment banking services that is playing fast and loose internally with their books and records, is this information that I pass on to the research department of my firm?
Given my understanding of most "Chinese Wall" policies and procedures, this would be a violation.
Maybe if we had a "Chinese Sieve"...
-- posted by setyoustraight
» SteveT - SEC, Invesco: Close to Settlement
http://story.news.yahoo.com/news?tmpl=st...
SEC, Invesco: Close to Settlement
By Judith Crosson
DENVER (Reuters) - Invesco Funds Group and federal regulators said on Thursday they are close to settling the government's civil lawsuit against the mutual fund company, but were having difficulty reaching a figure for compensating investors.
In December, the U.S. Securities and Exchange Commission (news - web sites) sued Denver-based Invesco, a unit of the Anglo-U.S. fund firm Amvescap (AVZ.L). The government claimed Invesco allowed selected investors to profit from market timing -- a rapid trading strategy where investors profit from inefficiencies in how mutual funds are valued.
"We're fairly close to a resolution but not quite there yet," SEC attorney Robert Fusfeld told U.S. District Judge Edward Nottingham during a hearing in federal court on Thursday.
Invesco's attorney Charles Mitchell told the judge "we feel we are very close."
Market timing became a central focus of a sweeping probe into the $7.6 trillion mutual fund industry announced in September 2003 by regulators.
Besides the SEC, Invesco was also sued by the states of New York and Colorado.
On Wednesday, Janus Capital Group Inc. (NYSE:JNS - news) said it reached a final $226 million settlement with securities regulators. The move by Janus sent Amvescap shares higher on Thursday on speculation Invesco's settlement would not cost as much as the $300 million the market had expected.
In January, Invesco's owner said it wanted to settle the lawsuit and would reimburse investors if they had been hurt by improper trading activities.
During Thursday's hearing, the judge said he did not understand why the case has not been settled yet. "What have you been doing for eight months?" the judge asked.
The SEC lawyer said all sides had economists who meet regularly who are trying to come up with a compensation number "that all parties can live with."
But it was difficult to reach a figure because there are "millions of transactions" over a 3- to 3-1/2 year period that make it an exhaustive effort to reach a dollar figure, Fusfeld said.
Last month the SEC said it wanted to file an amended complaint that would include additional claims and additional parties.
Fusfeld said that as of Tuesday the SEC and the unidentified parties had reached agreements, although he did not elaborate and declined to comment after the hearing.
Fusfeld also said the SEC wanted to add one additional claim against Invesco. "It would be an additional statute violation based on the same facts," he said, without elaborating.
The Invesco attorney said he was familiar with the additional claim -- prompting the judge to say, "Everybody seems to know what we're talking about here except the court."
The judge gave the SEC 20 days to file its amended complaint.
-- posted by SteveT
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