FPM Moot-Points:

Tweet Me Please!

Thursday 10 April 2014

NSWF: Litany of Litigation and Proceedings

FPM have been urged by its financial and non-financial relationships to prescribe that the SAC-saga should not fizzle out but go with a bang! SAC Capital (or yesterday renamed Point72 Asset Management LP) and Steven A Cohen are the search-tags for those not familiar with this story. Towards an end with a BANG we are still inviting the integrity of the US legislative and political establishment concerning the financial sector to step forward. If the career professionals are not too entrenched in cynical plutocratic values and have adherence to integrity then the US establishment can step-up-to-the-plate by validating its bona fide seriousness in policing its capital markets via the Securities Exchange Commission fairly and effectively. With co-operation from the other Federal agencies in the widespread insider trading probe started at the time of the Great Recession financial crisis in 2007-08, we urge a climatic finish to SAC prosecutions and earnest persistent efforts to weed-out and stamp-out the rife insider trading.

In FPM’s enterprise programme entitled “No Smoke Without Fire: Of Reputation Risk”, we campaign for: a) making a warning example of Steven A. Cohen as a proper deterrent; and b) towards long-term solutions to a perennial loophole in securities law which rewards cheating. This and such other financial fraud perpetrators are not committing victimless crime – pay attention to changes in your savings portfolio valuation!

SAC Capital's Litany of Litigation & Proceedings

Mr Cohen aged 57, is at the helm of his eponymous firm’s ignominy through a litany of insider trading investigation and litigation, shown above.  Clearly he is not tenuously linked to that litany but responsibility-wise tethered, despite he himself being not held accountable and charged by US Government prosecutors - so far!

If today’s headline guilty plea and overall US$1.8 bn settlement for SAC Capital and its entities are separately approved by Judge Laura Taylor Swain of Federal District Court of Lower Manhattan, even then the SAC-saga is still not put to bed! Assuming the details, as extracted and shown below, of Department of Justice attorney Preet Bharra’s settlement is not merely for a show of justice then we can still hope of real justice. Hope that actual enforcement for ANY suspected and investigated systematic cheats will ensue, and that “Too-Big-To-Prosecute” is no longer a valid “get-out-of-jail” card.

 “…this agreement does not provide any protection against prosecution or other enforcement action against the SAC Entity Defendants, any owner, shareholder, or employee of the SAC Entity Defendants or any other person… the agreement provides no immunity from prosecution for any individual and does not restrict the Government from charging any individual for any criminal offense and seeking the maximum term of imprisonment applicable to any such violation of criminal law.” Source: Court Documents SEC Attorney, Preet Bharara

FPM principals believe that encouraging the US enforcement authorities and publically profiling the “high watermark” SAC insider trading case can practically be a useful protest. Though SAC-saga case study dilettantes are not organised and visibly demonstrating outside Mr Cohen’s head office at 72 Cummings Point Road in Stamford, Connecticut - yet!  The SEC Enforcement Division under the lead of the US DoJ and its haranguers has convicted and mostly plea bargained with 80 insider trading ‘big wigs’ and conspirators, since first arrests in October 2009. While principals at FPM believe in indignant public protests, our enterprise aim is to embark on filling and complementing the void and model left by the DoJ in monitoring suspicious trading patterns. SAC investigation and prosecution lead to total US$2 bn plus earned for the US taxpayer and current and potential class-action members. There must be many institutions ready to join class actions unless those executives fear drawing attention to their own illicit trading activities. which are on the losing trade-position side of the much vaunted 22-years old asset manager in the crooked SAC-mould. FPM respondents have asked how much of the multi-billion reported settlement will actually be set-aside for compensation of SAC-trading counterparty victims and how much towards filling holes in US government finances?

Stop Press! As if on cue to support the FPM campaign the cavalry trumpet can be heard in the distant, viz: SEC Lawyer on Goldman CDO Case Describes How the Agency Wimped Out! (Hat tip Yves, Naked Capitalism!) This is a MUST MUST READ article about the enforcement apparatus prevalent in US Justice regarding “too-big-prosecute” billionaires, by a senior attorney insider. In this most revealing article, a US securities regulator veteran with 28-years SEC-service James Kidney, has a parting snipe, describing the institutional culture there:

 an agency that polices the broken windows on the street level and rarely goes to the penthouse floors… On the rare occasions when enforcement does go to the penthouse, good manners are paramount. Tough enforcement, risky enforcement, is subject to extensive negotiation and weakening… Source: Naked Capitalism, James Kidney April 2014, an excerpt of his retirement speech.

No comments:

Post a Comment

FPM welcomes sensible feedback on our blogs / website. Through our work FPM is evolving from an asset advisory model to an asset management proposition.