A New Witch Hunt...or is it?
After three plus years of snooping around, it seems that the Federal government is ready to blow the lid off insider trading wink-and-nudge practices at some of Wall Street's biggest name institutions.
The key surrounds passing of nonpublic information by independent analysts and consultants who work for companies that provide "expert network" services to hedge funds and mutual funds.
Since this topic has in many ways become the late motif of the post-crisis financial world, I don't think anybody needs to rant on it any further...however...
When you have names like Goldman, Janus, Citadel, SAC, First New York and Primary Global Research (among others) mentioned, you know we are knee deep in it. The only question is whether we will go through another two years worth of name calling or will heads roll this time around? Judging by the relative silence of how the government is proceeding I am sensing kill mode may be in effect.
My question for you guys is, where do you stand on insider trading?
I for one have always liked to point out that it is not only practiced but encouraged in commodity markets...
What if you are starting out your career at a firm which is embroiled in such a scandal?
Will you be tempted to join the fray? Speak out? Bury your head and play dumb?
How prepared are you for the potential fallout and the zeros that it can cost you, the youngest generation of Wall Street, down the line?
A Federal Grand Jury in New York has already heard evidence. Has the clock been ticking? Have we just failed to hear it?
May you be blessed to live in interesting times monkeys.
Same deal as steroids in professional sports, its tough to compete against guys who have an extra edge. I am all for cracking down on insider trading but given my experience with the situation I just dont see how substantial progress can be made. What are you gonna do, wire everyone, prevent people from going out to dinner? Its hopeless given the incentive structure and competitive pressure.
Well said. But just to play devil's advocate, I'll throw the Rockefeller Laws out there as an example of the effect hardcore punitive legislation can have on criminal activity when the will to curb is there.
The only problem with that reasoning is that the R. laws are aimed only at minorities (and repealed a few years ago). I highly doubt there would be any law aimed at Wall Street as an industry. Given the overall structure of WS, a majority cheat/cut corners etc.
bury my head
My mom said the first thought she had was that maybe there would be room in some of the companies after people got indicted so I could get a job. :P
Send them all to jail. Hang them by the balls and then quarter them and display each quarter in every corner of the city as a warning sign NOT TO FCUK around anymore.
Fuck them, hang them out to dry. You play you pay.
Although the ethical matter is cut and dried for me, as a matter of practicality I don't envision any sort of definite witchhunt being any process other than a painful, extended, overly-hyped ordeal that the media will feed on and use to spin a web of illegitimate propaganda that shadows the reputation of the financial services industry.
Insider Trading is a legal issue, not an ethical issue. Just like speeding is not ethically wrong, it is simply legally wrong.
I think the SEC enforces it just fine right now. Small time insider trading is not a big deal, but when you have serious cases that might alter the price of the stock and thereby hurt other investors the SEC should step in.
i know sb's are supposed to be anonymous but i accidentally gave you one - it was meant to be a stinky dodo.
you took a very bad example to emphasize your point. speeding IS a moral wrong - you endanger others by going over what many experts have deemed a safe speed. you may be an apt driver, but there are innumerable ways in which your speeding may endanger others. if you look at it logically, most laws, even the most ridiculous ones (not all, mind you) have a moral root. insider trading puts you at an advantage, but puts other, fair players, at a disadvantage. the prime goal of capital markets is to facilitate the transfer of capital. that transfer is contingent upon the trust in that system - the market's regulation and the assumed fairness of the system. by undermining the fairness and regulation by which all are expected to abide, you are undermining its legitimacy and trustworthiness as a primarily economic tool for the advancement of the economy. it's not a fighting arena for the fittest to survive, it's a tool that is meant to advance those willing to put their capital at risk - not a free salad bar for the high-and-mighty and their friends.
people do get hurt when some don't play by the rules.
@MMMcGoo - am a big fan of Pratchett too :)
Well is it ethically wrong to break the law? :) It's all intertwined.
So you don't view insider trading as ethically wrong Anthony? So, hypothetically of course, if you could get away with it you would have no moral qualms in doing so?
As far as ethical v. legal. Of course its a legal issue. Everyone knows that its not what you know but who you know 99% of the time in life. Why would trading be any different? Because the laws make it so that's why. If you knew someone who worked at XYZ firm and they got you a job, it wouldn't be "fair" to everyone else but its not illegal. Similarly, if you have access to inside info that can make you money, you would act on it at the expense of others but thats no different than you using a connection to get a job. You're depriving others from a 'fair market' chance at getting that job in order to enrich yourself.
When you are hunting, do you go after the 12-point buck or the doe right behind him? The SEC needs to focus on large insider trading scandals, not $50k blips. The SEC can use their resources much better than to follow around and wire every person in the nation they think has committed insider trading. Even though the SEC 's intelligence is questionable at times, they need to be efficient. Just more dollars of our tax $ going to wild goose chases..
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