1.8bn settlement between govt and SAC justified or chump change? Moreover, is insider trading going to stop (i crack up as i write this)?
What does FINRA do when they fine these companies? It seems like it’s a conflict of interest to fine somebody and then put the money in your own coffers.
Better that they donate it to a local charity. I hear there’s a pretty good charitable organization at 50 West 33rd Street in NYC.
The money goes to the US treasury. Wouldn’t the most appropriate thing to do is refund those who took opposing positions to SAC trades? Furthermore, investors of SAC will be uneffected, shouldnt their gains be seized? Finally, Cohen is NOT going to serve anytime and can trade his own (sizeable) funds at his leisure. I really wonder why i even bother investing in the market when all this bs occurs time and time again in plain sight.
The govt is realizing that to get money they can just extort money from companies. Don’t have to bother with any pesky law changes and the people normally don’t get too upset when the big evil companies get slapped with a few billion in fines.
That would be basically impossible to really figure out.
The funny part is the government makes tons of money on these violations, drug busts, seizing assets.
Imagine if everyone drove within the speed limit, or never got parking tickets. Govt revenues would take a massive beating!
Goldman 600M settlement, JPMorgan 4Bn, SAC 1.8Bn… that’s a lot of money. It’s like the “front office” revenue generating division of the govt
For debate purposes consider this example. SAC goes long XYZ on dec 1st 2011 and holds it for 3 months and sells Feb 2012. During this period they made, in ST gains, 20mm. Couldn’t you just see who sold short and bought puts during this same period of split the profits amongst them?
But even if you can see all the XYZ trades during that time, how would you know that the trades were collusive?
the problem comes in when everyone who sold and didn’t make those gains come out and say they want a piece of that money. How can you possibly figure out the reasons of who sold or not. What if a client was cashing out of everything, and now he then turns around and says he meant to hold it. Why should he get any of those gains? Hindsight is 20/20.
I wonder if people working in those divisions then get hired by the private sector at 3 times their salary. I doubt the competent ones stay too long working for the governemnt.
^A friend’s wife of mine just made this move and she says it’s expected. You gain valuable experience and then use that experience gained to defend.