Yesterday, a U.S. Attorney in New
York wrapped up a six-year investigation and charged SAC Capital Advisors with
four counts of securities fraud and one count of wire fraud.
In plain English, the feds are
going after SAC Capital Advisors for illegal insider trading.
Here's part of the indictment: "…for insider trading offenses committed by
numerous employees and made possible by institutional practices that encouraged
the widespread solicitation and use of illegal inside information. Unlawful
conduct by individual employees and an institutional indifference to that
unlawful conduct resulted in insider trading that was substantial, pervasive
and on a scale without known precedent in the hedge fund industry."
In plain English,
the folks at SAC Capital knew they were breaking the law, everybody was doing
it, they were doing it big-time, and they were screwing lots of investors like
you and me.
What's the big deal, you ask?
Doesn't "almost everybody" on Wall Street engage in insider trading
when they think they can get away with it?
Yeah, that's the big deal. There
are plenty of repeat offenders on Wall Street. The news report about the SAC
Capital indictment also mentioned that government watchdogs have charged about
80 firms and individuals with insider trading since 2009, and 73 of those
defendants were convicted. My guess is the other 7 defendants got lucky and
skated…
My other guess is that for every
person or brokerage that gets caught doing insider trading, there are dozens or
hundreds more that don't get caught, and make millions by fleecing other investors.
No comments:
Post a Comment