Posts Tagged ‘Legal’

Let’s Make Murder Illegal!

Let’s Make Murder Illegal!

Vinyl Ready Art - Holidays

Courtesy of Karl Denninger at The Market Ticker 

In a particularly picayune piece of irony FT reports:

The German government is planning to ban the naked short-selling of all German stocks listed on the country’s exchanges in a sweeping enlargement of last week’s contentious bar on the naked short-selling of some securities.

To be clear: Naked short-sales are already illegal.

A bit of explanation is called for here.  You can’t sell something you don’t own.  Therefore, to sell short you have to first acquire what you wish to sell.  To do this you borrow it from someone else.  For example:

"A" owns 100 shares of IBM stock.
"B" wishes to sell short 100 shares of IBM stock.

"B" therefore borrows "A"s stock, replacing that stock with an IOU for the 100 shares, and then sells them to "C".

There are still only 100 shares of stock.  "A" is entitled to whatever dividends would normally be paid by those 100 shares even though he doesn’t have them any more, and "B" has to make good on that.  "C" has the physical shares and gets the cash dividends that are paid on them, if any.

If "A" wishes to sell his 100 shares "B" must return them.  He must return them because the IOU "A" has is callable on "A"s demand, irrespective of the price "B" might have to pay to acquire them!

That price might be very high if there are no willing sellers at a "reasonable" price when "B" has to repurchase them.  But that doesn’t matter – "B" agreed to this when he entered into the short sale.  This event, called a "short squeeze", is one of the risks of selling securities short – since you don’t own them and have to borrow them the person you borrowed them from might want them back at any point in time – and you’re obligated to deliver if that happens, even if it bankrupts you (and sometimes it does!)

Unscrupulous people can and have gotten around this problem.  How? By not actually having acquired the securities they allegedly sell short!

Hang on a second…. how is that possible?

Today, it’s very possible.  "Back in the day" it was pretty tough, since stocks were represented as physical pieces of paper.  When the trade settled you…
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Goldman, Sears, Others Named In Insider Trading Subpoenas

Goldman, Sears, Others Named In Insider Trading Subpoenas (GS, SHLD)

Courtesy of Clusterstock, by Lawrence Delevingne

 

 


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Rajaratnam Pal: “I’ll Be Like Martha F**** Stewart”

Rajaratnam Pal: "I’ll Be Like Martha F**** Stewart"

Courtesy of Joe Weisenthal at Clusterstock

Some great stuff here, courtesy of the Manhattan DA’s complaint. This part in particular (which Alphaville caught) sounds very, very prophetic.

marthaeffinstewart.png

Meanwhile, this doesn’t look good for Moody’smoodysleaks.png

Source: Hedge Fund Insider Trading PR

Raj RajaratnamSee Also:

Raj Rajaratnam Big Democratic Booster

Feds Perp Walk Raj Rajaratnam

Raj Rajaratnam, Founder of $3 Billion Galleon Group Hedge Fund, Arrested (GOOG, AMD, AKAM, CLWR)

 


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Wall Street Panics In Wake Of Galleon Insider Trading Case

Wall Street Panics In Wake Of Galleon Insider Trading Case

fleeCourtesy of John Carney at Clusterstock

Traders at hedge funds and Wall Street trading desks are quaking over the news that the FBI tapped the phone lines of Galleon founder Raj Rajaratnam. 

The news that the government is (finally) employing techniques typically used against organized crime or international drug cartels is raising fears about who might be next.

We spoke to traders at two prominent hedge funds who both described the feeling at their firms as “panicked.”

“Suddenly you are wondering about every conversation you’ve had about a public company, wondering if the Feds were listening in,” one trader said.

Traders spend a lot of time exchanging information with colleagues and reaching out to people in the industries they cover in hopes of gaining an edge. Rumors, gossip and loose talk are their bread and butter.

Raj RajaratnamMost of this is fair game. But if the ultimate source is an insider or the news is about a major deal that has yet to be announced, the trader can step into dangerous legal territory.

Even when traders learn inside information, there is usually little chance of getting caught. The SEC watches unusual trading activity but an active trader will usually get a pass if he’s buying or selling stocks that he usually trades in anyway.

Even those cases that do come up are hard to prosecute, especially if no one confesses. So occasional civil cases are brought but almost no criminal cases emerge involving traders.

This case shattered that pattern because the government used the tools it uses against hardcore drug criminals and terrorists to uncover the alleged insider trading.

Traders are now living in a very different world. Legally speaking, trading is far more dangerous than anyone knew.

Now see the scandal in photos >

See Also:

Raj Rajaratnam Funded Sri Lankan Terror Group

Galleon "Shocked" By Raj Rajaratnam Arrest

Will Raj Rajaratnam Spend 200 Years In Jail?

 

Previously, John Carney reporting:

Raj Rajaratnam, Founder of $3 Billion Galleon Group Hedge Fund, Arrested (GOOG, AMD, AKAM, CLWR)

Prosecutors and the FBI have announced that they have filed charges against several people involved with the Galleon Group hedge fund, including founder Raj Rajaratnam. Galleon is a major hedge hund player known for its investment in technology stocks…

Most notably, the government is filing criminal…
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Bove: Wells Fargo Sitting On A Volcano About To Explode (WFC)

Bove: Wells Fargo Sitting On A Volcano About To Explode (WFC)

 Courtesy of Yael Bizouati at Clusterstock

 


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It’s Time For A Market In Human Organs

I’ve added a few comments at the end, relying on old information, but from the content of this article, there’s been no improvement in the situation in the last 15 years.  Thanks to Joe for bringing up this important topic! – Ilene

It’s Time For A Market In Human Organs

Apple CEO Steve Jobs (400x300)Courtesy of Joe Weisenthal at ClusterStock

The Boston Globe’s Jeff Jacoby writes that the Steve Jobs liver transplant, and the fact that he may have put his name on the list of several states in order to ensure maximum odds of getting a liver, is a reminder of how horribly broken and dysfunctional this current system is.

What we need is a market mechanism to compensate and encourage organ donors:

No one would dream of suggesting that medical care is too vital or sacred to be treated as a commodity, or to be bought and sold like any other service. If the law prohibited any “valuable consideration’’ for healing the sick, the result would be far fewer doctors and far more sickness and death.

The result of our misguided altruism-only organ donation system is much the same: too few organs and too much death. More than 100,000 Americans are currently on the national organ waiting list. Last year, 28,000 transplants were performed, but 49,000 new patients were added to the queue. As the list grows longer, the wait grows deadlier, and the shortage of available organs grows more acute. Last year, 6,600 people died while awaiting the kidney or liver or heart that could have kept them alive. Another 18 people will die today. And another 18 tomorrow. And another 18 every day, until Congress fixes the law that causes so many valuable organs to be wasted, and so many lives to be needlessly lost.

The fact that we have so many people waiting for kidneys, waiting on expensive and painful dialysis, is proof of how bad the system is, since healthy people don’t need two kidneys, and since having only one kidney doesn’t increase your own odds of getting sick (kidney failure strikes both at the same time, typically).

Rather than delve into all the details of how it would work in practice, let’s just consider some common objections to organ markets, and why they’re all so


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Chrysler’s Lawyers Tell Supreme Court That A Stay Will Kill Fiat Deal

Courtesy of John Carney at ClusterStock

Chrysler’s Lawyers Tell Supreme Court That A Stay Will Kill Fiat Deal

caroffcliff.jpgChrysler’s lawyers filed a brief this morning responding to the stay applications of the pension fund creditors. The brief was written by by Thomas Cullen of Jones Day in D.C. and makes some highly explosive claims about the effects of a possible stay.

Tony Mauro of the Blog of the Legal Times describes the brief:

In light of the company’s  "fragile state and daily erosion of value," Cullen argues that a stay would mean that "the sale will not happen," and the challengers would effectively prevail — even though lower courts have upheld the sale agreement. That result would also force the company into liquidation and "cause massive harm to Chrysler and the public interest," the brief asserts.


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Phil's Favorites

Momentum Monday - Liquidity, Liquidity, Liquidity...The Startup Multiplier Effect and The SPAC is Back?

 

Momentum Monday – Liquidity, Liquidity, Liquidity…The Startup Multiplier Effect and The SPAC is Back?

Courtesy of Howard Lindzon

Good Monday morning everyone.

I will get right to it…here is this weeks Momentum Monday episode with Ivanhoff and I talking markets and momentum. We share a few new ideas – take a look at $JAMF (Apple has finally come for the Fortune 1000) and $EBAY (the long tail winner of collectibles boom) and let us not forget Tesla back at all-time highs. You can watch/listen to thi...



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Zero Hedge

German Official Warns Risk Of Electric Vehicle Fires Is "Completely Unaddressed" 

Courtesy of ZeroHedge View original post here.

Last month, a massive fire broke out at a German bus depot, destroying 20 electric buses. First responders weren't prepared nor properly trained in extinguishing lithium-ion fires. The fire prompted one German official to question the zero-emissions vehicles as the "spontaneously" combustion of the batteries "is completely unaddressed," according to RT News

"The risk of these fires, including in other locations ...



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Politics

Trump wants the National Archives to keep his papers away from investigators - post-Watergate laws and executive orders may not let him

 

Trump wants the National Archives to keep his papers away from investigators – post-Watergate laws and executive orders may not let him

Nixon resigned after tapes he had fought making public incriminated him in the Watergate coverup. Bettmann/Getty

Courtesy of Shannon Bow O'Brien, The University of Texas at Austin College of Liberal Arts

The National Archives is the United States’ memory, a repository of artifacts that includes everything from half-fo...



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Biotech/COVID-19

An infectious disease expert explains new federal rules on 'mix-and-match' vaccine booster shots

 

An infectious disease expert explains new federal rules on ‘mix-and-match’ vaccine booster shots

Discuss with your doctor whether or not you need a booster – and if so, which vaccine will work best for you. Justin Sullivan/Getty Images News via Getty Images

Courtesy of Glenn J. Rapsinski, University of Pittsburgh Health Sciences

Many Americans now have the green light to get a COVID-19 vaccine booster – and the flexibility to receive a different brand than the ori...



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Digital Currencies

Bitcoin: why its value has rocketed once again

 

Bitcoin: why its value has rocketed once again

Shutterstock/rzoze19

Courtesy of Andrew Urquhart, University of Reading

Bitcoin’s journey into mainstream finance has reached another major milestone – and another record price. The cryptocurrency was trading at US$66,975 (£48,456) following the launch of an exchange traded fund (ETF) in the US w...



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Chart School

Price and Volume Swing Analysis on Bitcoin and Silver

Courtesy of Read the Ticker

Many take guidance from news, pundits or advisors. Well sometimes the swings of price and volume are a better measure of what happens next.

The big boys do not accumulate or distribute in single 1 second trade, they build positions over weeks, months and years. They use price swings in the market to build or reduce positions, and you can see their intent by studying swings of price and volume and applying Tim Ord logic as written in his book called 'The Secret Science of Price and Volume: Techniques for Spotting Market Trends, Hot Sectors, and the Best Stocks'.

Tim Ord is a follower of Richard Wyckoff logic, his book has added to the studies of Richard Wyckoff, Richard Ney and Bob Evans.

Richard Wyckoff after years of...

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Promotions

Phil's Interview on Options Trading with TD Bank

TD Bank's host Bryan Rogers interviewed Phil on June 10 as part of TD's Options Education Month. If you missed the program, be sure to watch the video below. It should be required viewing for anyone trading or thinking about trading using options. 

Watch here:

TD's webinar with Phil (link) or right here at PSW

Screenshots of TD's slides illustrating Phil's examples:

 

 

&n...



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Kimble Charting Solutions

Crude Oil Cleared For Blast Off On This Dual Breakout?

Courtesy of Chris Kimble

Is Crude Oil about to blast off and hit much higher prices? It might be worth being aware of what could be taking place this month in this important commodity!

Crude Oil has created lower highs over the past 13-years, since peaking back in 2008, along line (1).

It created a “Double Top at (2), then it proceeded to decline more than 60% in four months.

The countertrend rally in Crude Oil has it attempting to break above its 13-year falling resistance as well as its double top at (3).

A successful breakout at (3) would suggest Crude Oil is about to mo...



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ValueWalk

Managing Investments As A Charity Or Nonprofit

By Anna Peel. Originally published at ValueWalk.

Maintaining financial viability is a constant challenge for charities and nonprofit organizations.

Q4 2020 hedge fund letters, conferences and more

The past year has underscored that challenge. The pandemic has not just affected investment returns – it’s also had serious implications for charitable activities and the ability to fundraise. For some organizations, it’s even raised doubts about whether they can continue to operate.

Finding ways to generate long-term, sustainable returns for ...



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Mapping The Market

Suez Canal: Critical Waterway Comes to a Halt

 

Suez Canal: Critical Waterway Comes to a Halt

Courtesy of Marcus Lu, Visual Capitalist

The Suez Canal: A Critical Waterway Comes to a Halt

On March 23, 2021, a massive ship named Ever Given became lodged in the Suez Canal, completely blocking traffic in both directions. According to the Suez Canal Authority, the 1,312 foot long (400 m) container ship ran aground during a sandstorm that caused low visibility, impacting the ship’s navigation. The vessel is owned by Taiwanese shipping firm, Evergreen Marine.

With over 2...



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The Technical Traders

Adaptive Fibonacci Price Modeling System Suggests Market Peak May Be Near

Courtesy of Technical Traders

Our Adaptive Fibonacci Price Modeling system is suggesting a moderate price peak may be already setting up in the NASDAQ while the Dow Jones, S&P500, and Transportation Index continue to rally beyond the projected Fibonacci Price Expansion Levels.  This indicates that capital may be shifting away from the already lofty Technology sector and into Basic Materials, Financials, Energy, Consumer Staples, Utilities, as well as other sectors.

This type of a structural market shift indicates a move away from speculation and towards Blue Chip returns. It suggests traders and investors are expecting the US consumer to come back strong (or at least hold up the market at...



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Lee's Free Thinking

Texas, Florida, Arizona, Georgia - The Branch COVIDIANS Are Still Burning Down the House

 

Texas, Florida, Arizona, Georgia – The Branch COVIDIANS Are Still Burning Down the House

Courtesy of Lee Adler, WallStreetExaminer 

The numbers of new cases in some of the hardest hit COVID19 states have started to plateau, or even decline, over the past few days. A few pundits have noted it and concluded that it was a hopeful sign. 

Is it real or is something else going on? Like a restriction in the numbers of tests, or simply the inability to test enough, or are some people simply giving up on getting tested? Because as we all know from our dear leader, the less testing, the less...



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Insider Scoop

Economic Data Scheduled For Friday

Courtesy of Benzinga

  • Data on nonfarm payrolls and unemployment rate for March will be released at 8:30 a.m. ET.
  • US Services Purchasing Managers' Index for March is scheduled for release at 9:45 a.m. ET.
  • The ISM's non-manufacturing index for March will be released at 10:00 a.m. ET.
  • The Baker Hughes North American rig count report for the latest week is scheduled for release at 1:00 p.m. ET.
...

http://www.insidercow.com/ more from Insider





About Phil:

Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...

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About Ilene:

Ilene is editor and affiliate program coordinator for PSW. Contact Ilene to learn about our affiliate and content sharing programs.