Friday, May 30, 2008

Charges of Insider Trading for Wall St. Luminary

Spent decades teaching at business schools and watching students parlay lessons into fortunes. Lectured at Goldman, DB and Merrill. Few people on or off Street moved in such rarefied circles.

Tuesday, May 27, 2008

Future of Financial Regulation?

Geithner Plan to Save the Financial System - NY Fed proposals to help shore up our “fragile” financial network: Greater capital and liquidity requirements; more supervision of derivatives; NYT/FT

Bear wipeout signals sea change-step in makeover. May 29 Fortune article "Bear wipeout signals sea change"

Fed and SEC Oversight Relationship debate ongoing. Paulson Blueprint would make Treasury the uber-financial regulator. SEC Chairman Cox advocated increased supervisory role over the major investment banks that it currently oversees through the Consolidated Supervised Entities (CSE) system. Washington Post explored how Fed and SEC are working out joint involvement in aftermath of Bear rescue. Fed staff members from both the bank supervision and markets groups accompanying SEC on visits to big I-Banks. Meanwhile SEC preparing a Memorandum of Understanding to formalize information-sharing and cooperative efforts. Fed Keeps Watch on Wall St. -- From the Inside.
SEC Chief to Press on Global Rules-WSJ

Thursday, May 22, 2008

Knight's Pasternak, Leighton finally to pay piper?

Pasternak focused on federal courthouse in Trenton. He and other former Knight SEC sued Pasternak and John Leighton, defending against SEC civil fraud allegations, they stand accused of allowing improper trading. Already sanctioned, NASD fined each $100K for supervisory violations. Case involves Leighton's brother, Joe, former Knight sales trader who regulators said defrauded customers by overcharging them tens of millions of commission dollars. Joe paid more than $4 million to settle civil charges brought by the SEC and NASD.

Knight agreed in 2004 to pay more than $79 million to settle charges related to Joe's actions. NASD arbitration panel concluded Pasternak's response to "red flags of possible misconduct was woefully inadequate." Pasternak and John Leighton, who headed Knight's institutional trading desk, have insisted their actions were proper. Read Star Ledger

Monday, May 12, 2008

SEC to Rein in Wall St....Where Are They Now?

SEC Plans to Rein in Wall St.

SEC's Cox's response to Bear collapse is to call for greater agency oversight over the four remaining "consolidated supervised entities" -- Morgan Stanley, Goldman, Lehman and Merrill --- giant firms that do not have a bank that subjects them to Fed supervision. Cox has called for more disclosure about capital and liquidity and a reduction of short-term financing. WSJ Heard on the Street column questioned whether additional disclosure about capital and liquidity would be useful to investors. Reducing leverage might be useful, although Street will complain that SEC turning "pit bulls into poodles." A good thing? WSJ,5/9/08 The SEC's Show of Force.

Where Are They Now?
Link to interactive feature...for notorious White Collar criminals

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