Rajaratnam Guilty on All 14 Counts...

NakedPuts Wrote: ------------------------------------------------------- > > Also feel free to take my broad post as a direct, > personal attack on yourself, then turn around and > call me self-righteous. Nice. You’re confusing self-righteous with maybe self-involved? Because your point makes no sense. People gotta get their comparisons straight around here.

The Jury usually doesn’t get to know the possible punishment. They either call guilty or not guilty. Knowing the possible punishment will usually sway their judgement. He was busted for “profiting” 60 million. It’s a lot of money, but not really in the grand scheme of things. The truly sad part is how the FBI operates in cases like this. They always give lean sentences for “cooperating” accomplices in exchange for wearing wires, testimony, and being a rat. And then go hard after 1 person. Raj’s sentence should’ve been slightly reduced and everybody else should have longer setnences.

Somehow this reminds me of a great line from the movie Syriana: " wait, this is the oil business we’re talking about, right?"

Black Swan (BS?), here is what you wrote: “Yes, insider trading is bad, it hurts the ability of markets to operate efficiently by scaring away investors. Although, to be honest, it mainly has a negative impact when it’s used to profit the individual, not to benefit his investors. Again, not saying he shouldn’t be punished, but 20 years of someone’s life is a terrible thing to waste when that person doesn’t pose a malevolent threat to society. This is punitive, not corrective.” What are you trying to say? Which side are you for? No malevolent threat to society? Most white collar crime dont’t post malevolent threat at all. That’s partially why it’s called white collar crime…

AlphaSeeker Wrote: ------------------------------------------------------- > What are you trying to say? Which side are you > for? I didn’t know I had to “pick sides” here, but if I had to I’m for whichever side says 20 years is pretty harsh and not in line with punishments dealt out (or altogether ignored) with other executives. Particularly since he did not cheat his investors. It’s pretty simple. Yes, send him to jail, maybe even up to 10 years. But 20 for a man his age is pretty close to a life sentence. And I don’t think a man who was dishonest and broke regulations but did not destroy his investors wealth should be given a life sentence. As I said, I prefer punishments that are corrective in nature, not purely punitive or vengeful. > No malevolent threat to society? Most white collar > crime dont’t post malevolent threat at all. That’s > partially why it’s called white collar crime… Not true, Madoff and the folks at Enron destroyed their investor’s worth, cost people their retirement $ and life savings. They destroyed charities that were invested with them. Raj did none of these things. He was strangely conscientious about how he treated his investors despite his cheating the markets. I mean, Skilling destroyed an $11B company through fraud, cost all those jobs, destroyed people’s life savings and pensions and lined his pockets through self-dealing. He got 24 years at a younger age. Raj here cheated and made $60M by skimming markets on inside info but did not destroy billions of dollars of wealth or ruin lives, yet he gets 20.

to understand the damage of insider trading and market confidence, you have to think of a situation with a small company with few shareholders. say the geologist for a mining company gets to evaluate a drilling report prior to making it public information and he knows it will surpass any expectations and the stock will probably double in response. assuming there is no hard-line on insider trading (i.e. the world that some of you want), this geologist tells people in his network, they buy a load of the stock and the stock goes up 100%. the stock is halted and is forced to respond about the share price activity. they respond saying, we hit some good grade ore. the shareholders who didn’t have any new information who sold into that 100% rally that day are pissed because had the news come out before they sold their shares for a say a 20% gain on the day, they would have reaped a 100% gain. a 20% gain may have made the stock overvalued with no new information so they sold, but the new information allowed the stock to remain fairly priced, even after a 100% gain. THE MAIN POINT: why should the people who work for the public companies and/or their networks reap all of the upside by literally stealing shares from current shareholders who do not know that their shares are worth 100% more? if we institute rules to protect shareholders of small companies where loss is clear and substantial, of course we have to insititue rules for large cap companies where the loss is small and immaterial. there is no ethical difference between stealing $60m from shareholders of a $200m market cap company and stealing $60m from shareholders of a $200b market cap company. i wouldn’t invest in a market where there were no penalties to insider trading. all of you shouldn’t either. why play in a market where you have a clear disadvantage.

^ Again, he did not “steal”, his counter parties had already chosen to voluntarily transact. What you guys are willfully choosing to ignore, is that additional counter parties (such as Raj) would have actually IMPROVED the transaction price for his trade partners by increasing demand. Yes, he did cheat, and yes, he should be punished, with SOME jail time to maintain integrity of markets. But the amount in question and the actual nature of the crime should also have an impact.

anyone attacking market confidence is attacking democracy and the american way of life. i’d go so far to say that insider trading is a terrorist activity as it increases fear in markets and in turn increases the cost of capital. without harse punishment for this terrorist activity, one (america) would be letting this fear premium to expand and further increase the cost of capital. insider trading is an attack to all capital and those who hold capital. america holds the most capital so the practice of insider trading is an attack on america specifically and what it stands and fights for.

Black Swan Wrote: ------------------------------------------------------- > ^ Again, he did not “steal”, his counter parties > had already chosen to voluntarily transact. What > you guys are willfully choosing to ignore, is that > additional counter parties (such as Raj) would > have actually IMPROVED the transaction price for > his trade partners by increasing demand. Yes, he > did cheat, and yes, he should be punished, with > SOME jail time to maintain integrity of markets. > But the amount in question and the actual nature > of the crime should also have an impact. voluntarily transact based on different information. if insider trading went unpunished, there would be no parties willing to voluntarily transact. so the expanded prevalence of insider trading would make your arguement worthless. and without harse punishment, insider trading would flourish. also, you’re missing the link between valuation and trading behaviour. if i think my stock is fairly valued and raj buys it until its up 10% on the day, i’d gladly sell to him b/c he’s an idiot. but it turns out he has information that i don’t, so now i’m the idiot for even being invested because had i have had his information, i would’ve made 100% instead and maybe my LT return would be what it should be without the raj’s of the world, literally stealing my returns with superior information. say raj were to steal 90% of your upside in every single investment in your portfolio. would your return reflect anything near what you should have attained? if you’re net worth is $10M and you sell out of your stock when it becomes overvalued at $11M but you would have had $20M with Raj’s information. how is this not stealing?

BS wrote: "As I said, I prefer punishments that are corrective in nature, not purely punitive or vengeful. " All prison terms are punitive in nature because it cuts off their interaction with their normal lives and takes away their freedom for the term. The corrective part is only an after event. If they don’t commit the same crime again, you can assume it’s more corrective than not. I am all for free market and capitalism. But insider trading is poison to the free market capitalism well.

one final point. increasing prevalence of insider trading would put a greater importance on momentum and less importance on valuation. investors would begin to interpret individual stock movement in a no-news environment as a sign that some investors know something that the rest don’t and that there will be a major windfall in the near future. there would be even greater ups and down. increased emphasis on momentum strategies would further would reduce the efficiency of capital allocation and would increase market volatility. this change in investor behaviour combined with the increase in the cost of capital would have a major impact on the value of all investments. raj should be tried as one of the world’s most notorious terrorists of capital. i suppose that because terrorists of lives lose their life (i.e. assassination), terrorists of capital should lose their capital. so maybe prison is not warranted, but complete removal of all capital, financial and human would be appropriate. wait, that’s what a life sentence is anyway so i guess he got a fair sentence.

The way I see it is that Raj was engaging in basically performance enhancing drugs, if you will. He was cheating in order to win. Madoff was cheating in order to lose, or “match-fixing” for the Indians here. I don’t think they’re comparable at all. Again, who was the victim here? The other sides were going to trade anyways, and had Raj not acted, the other guys would have still lost money on the trades. I think the person who should be punished is Gupta, for leaking confidential info, but I think Raj should get off with something like a ban on securities trading. Now I agree that he broke the law, but 20 years is too harsh for a victimless crime.

With all due respect, you sound like a retard matt I’m saying he should have got a smaller punishment. People like you call hackers cyber terrorists and now raj is a “Capital terrorist”. Take your ideological fear mongering elsewhere. I understand why the law’s in place, that’s why I said he should be punished. You keep misconstruing my argument as one for innocence because without doing so your polarized overly dramatic rhetoric would be openly meaningless. We’re talking a few insignificant millions here. By your logic, shoplifters are bodega terrorists. They’re an affront to capitalism and freedom fries (where’s my shotgun!), they fight for anarchy, because of the ramifications using your “what if everyone did it” argument, shop owners would lose confidence in the marketplace and refuse to sell. Consumers get charged more through surveilance. Therefore, every shoplifter…wait, bodega terrorist deserves to lose all their worldly goods. Wait, that’s like a life sentence. In which case, let’s just give them life in jail.

Matt, does this make Martha Stewart the Osama Bin Laden of capital terrorists?!? Quick, someone call Seal Team 6!

I guess the people who download things on torrent are “music terrorists”.

this thread is full of fail

starbuk Wrote: ------------------------------------------------------- > this thread is full of fail ^great point starbuk, you really pwned us

I believe in big punishment. If the harsh sentence deters just ONE individual of doing the same in the future, then the justice system did its job.

So let’s start impaling them on stakes. That will deter others from doing insider trading!

Don’t be silly Plantir, now you’re just giving the capital terrorists a martyr. We could remove his hands and nail them to the doors of the NYSE building. Message delivered.