Too Big To Jail?

Are you surprised by the news that Ralph Cioffi and Matthew Tannin skated on all charges? I know I am. I'm just not used to seeing a government case collapse after they've piled on a bunch of charges. The jury was unconvinced, though, and only took 9 hours of deliberation to deliver their Not Guilty verdict.

This got me wondering about the state of public outrage toward bankers and how maybe the sentiment portrayed by the media produces more light than heat. At the end of the day (annoying bankerspeak), maybe individual Americans are still able to set emotions aside and approach a deliberative process dispassionately. Perhaps this bodes well for the next bankers on the chopping block.

I'm beginning to wonder if Raj Rajaratnam's flamboyance might sway a jury. Imagine the blow to the government that acquittal would represent. I mean, they think this guy went so far as to fund the Tamil Tigers - a known terrorist organization. Cioffi-Tannin has to be a major wake-up call for the Feds that they'd better bring their "A" game if they're hoping for convictions.

My old boss is going to trial in January for some pretty nefarious shit. To make a long story short, he bilked investors out of about $10 million in a FOREX scam and now he's facing a total of 300 years in prison and about $20 million in fines. He waived his right to a speedy trial when he was indicted in mid-2007, probably thinking he wanted to put a little distance between his jury and all the bad press he was getting at the time.

A couple months ago, I would've bet that a jury would give him the chair if they could. But after yesterday's verdict, I'm no longer so sure. The government had pretty damning recorded evidence against Cioffi and Tannin, and it wasn't enough to sway the jury. Maybe my old boss will skate too, and go back to doing big lines of crystal meth and banging his butt-ugly trading assistant.

On the one hand, you have guys like Madoff who are just so tired of being a crook that they cop to everything and make it easy. On the other hand, you have guys who are very, very careful and make building a case against them pretty tough. I generally believe the government goes after the low-hanging fruit. This tendency and the government's reliance upon taped evidence may actually work in Raj's (and my old boss's) favor.

Prosecutors today told Katz they have a strong case against Rajaratnam, 52, which is based on recorded conversations he made and on the testimony of several witnesses including former Intel Corp. executive Roomy Khan.

I think it's going to take more than the tapes to get a conviction.

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