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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Zero Hedge

Philly Fed Unexpectedly Soars To Second Highest Since Financial Crisis

Courtesy of ZeroHedge View original post here.

Anyone expecting the coronavirus pandemic to hit regional Fed surveys following the recent plunge in the Chicago PMI was in for a disappointment this week, when first the NY Fed's Empire State mfg survey unexpectedly printed at the highest since mid-2018, and then moments ago the Philly Fed blew it out of the ballpark with a massive surge in its business outlook survey, where the current general activity rose nearly 20 points this month to 36.7, smashing expectations of a drop from 17.0 to 11.0, and the highest index reading since February 2017. More importantly, this was the se...



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The Technical Traders

Is The Technology Sector Setting Up For A Crash? Part IV

Courtesy of Technical Traders

As we continue to get more and more information related to the Coronavirus spreading across Asia and Europe, the one thing we really must consider is the longer-term possibility that major global economies may contract in some manner as the Chinese economy is currently doing.  The news suggests over 700+ million people in China are quarantined.  This is a staggering number of people – nearly double the total population of the entire United States.

If the numbers presented by the Chinese are accurate, the Coronavirus has a very high infection rate, yet a moderately small mortality rate (2~3%).  Still, if this virus continues to spread throughout the world and infects m...



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Phil's Favorites

Why Trump's post-impeachment actions are about vengeance, not retribution

 

Why Trump's post-impeachment actions are about vengeance, not retribution

President Trump fired Army Lt. Col. Alexander Vindman for testifying in his impeachment trial. AP Photo/Susan Walsh, File

Courtesy of Austin Sarat, Amherst College

Since the end of his Senate impeachment trial, President Donald Trump has carried out a concerted campaign against ...



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Biotech & Health

Deep learning AI discovers surprising new antibiotics

 

Deep learning AI discovers surprising new antibiotics

A colored electron microscope image of MRSA. NIH - NIAID/flickr, CC BY

Courtesy of Sriram Chandrasekaran, University of Michigan

Imagine you’re a fossil hunter. You spend months in the heat of Arizona digging up bones only to find that what you’ve uncovered is from a previously discovered dinosaur.

That’s how the search for antibiotics has panned out recently. The relatively few antibiotic hunters out there ...



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Kimble Charting Solutions

King Dollar Going To Lose Strength Here? Gold & Silver Hope So!!!

Courtesy of Chris Kimble

Is King$ and the Euro facing important breakout/breakdown tests at the same time? It looks like it in this chart!

The US$ trend remains up, as it has created a series of higher lows since the start of 2018. The opposite can be said for the Euro, as it has created a series of lower highs since early 2018.

The US$ is currently testing the top of its 18-month rising channel, as the Euro is testing the bottom of its falling channel.

What King$ and...



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Insider Scoop

The Daily Biotech Pulse: Heron Pain Drug Review Extended, Disappointment For Teva In Tourette Syndrome Study

Courtesy of Benzinga

Here's a roundup of top developments in the biotech space over the last 24 hours.

Scaling The Peaks

(Biotech Stocks Hitting 52-week highs on Feb. 19)

  • Adverum Biotechnologies Inc (NASDAQ: ADVM)
  • Akebia Therapeutics Inc (NASDAQ: AKBA)
  • Ana...


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Digital Currencies

Altcoin season 2.0: why bitcoin has been outgunned by crypto rivals since new year

 

Altcoin season 2.0: why bitcoin has been outgunned by crypto rivals since new year

‘We have you surrounded!’ Wit Olszewski

Courtesy of Gavin Brown, Manchester Metropolitan University and Richard Whittle, Manchester Metropolitan University

When bitcoin was trading at the dizzying heights of almost US$2...



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ValueWalk

What US companies are saying about coronavirus impact

By Aman Jain. Originally published at ValueWalk.

With the coronavirus outbreak coinciding with the U.S. earnings seasons, it is only normal to expect companies to talk about this deadly virus in their earnings conference calls. In fact, many major U.S. companies not only talked about coronavirus, but also warned about its potential impact on their financial numbers.

Q4 2019 hedge fund letters, conferences and more

Coronavirus impact: many US companies unclear

According to ...



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Chart School

RTT browsing latest..

Courtesy of Read the Ticker

Please review a collection of WWW browsing results. The information here is delayed by a few months, members get the most recent content.



Date Found: Tuesday, 01 October 2019, 02:18:22 AM

Click for popup. Clear your browser cache if image is not showing.


Comment: Wall of worry, or cliff of despair!



Date Found: Tuesday, 01 October 2019, 06:54:30 AM

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Comment: Interesting.. Hitler good for the German DAX when he was winning! They believed .. until th...



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Members' Corner

How to Stop Bill Barr

 

How to Stop Bill Barr

We must remove this cancer on our democracy.

Courtesy of Greg Olear, at PREVAIL, author of Dirty Rubles: An Introduction to Trump/Russia

...



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Lee's Free Thinking

Why Blaming the Repo Market is Like Blaming the Australian Bush Fires

 

Why Blaming the Repo Market is Like Blaming the Australian Bush Fires

Courtesy of  

The repo market problem isn’t the problem. It’s a sideshow, a diversion, and a joke. It’s a symptom of the problem.

Today, I got a note from Liquidity Trader subscriber David, a professional investor, and it got me to thinking. Here’s what David wrote:

Lee,

The ‘experts’ I hear from keep saying that once 300B more in reserves have ...



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Mapping The Market

How IPOs Are Priced

Via Jean Luc 

Funny but probably true:

...

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Promotions

Free eBook - "My Top Strategies for 2017"

 

 

Here's a free ebook for you to check out! 

Phil has a chapter in a newly-released eBook that we think you’ll enjoy.

In My Top Strategies for 2017, Phil's chapter is Secret Santa’s Inflation Hedges for 2017.

This chapter isn’t about risk or leverage. Phil present a few smart, practical ideas you can use as a hedge against inflation as well as hedging strategies designed to assist you in staying ahead of the markets.

Some other great content in this free eBook includes:

 

·       How 2017 Will Affect Oil, the US Dollar and the European Union

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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.