At some point in the first half of next year, if all goes according to plan, 12 New Yorkers will confer in a room and decide whether five former employees of convicted Ponzi-schemer Bernard Madoff are guilty or innocent of helping him run the fraud. The process of selecting those 12, uh, lucky souls continued on Thursday ahead of the official start of the trial, now expected Tuesday. More in the Wall Street Journal [...]
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The trustee liquidating the brokerage unit of MF Global Holdings Ltd has asked a federal bankruptcy judge for permission to return remaining funds to commodity trader customers affected by the firm’s 2011 collapse. Wednesday’s request by court-appointed trustee James Giddens would reallocate some money earmarked for general unsecured creditors to customers of the brokerage, who have a higher-priority payback status. The move could bring closure to customers who have waited nearly two years to fully recover their money, which became tied up when MF Global went bankrupt on Oct. 31, 2011. More on Reuters [...] U.S. securities regulators are launching a website to provide the public with extensive equity market data, a move that will help shed light on high-speed electronic trading and inform the heated debate over market structure reforms. The Securities and Exchange Commission has been examining complaints for years that high-frequency trading puts ordinary investors at a disadvantage and should face new regulations or monitoring. High-speed traders, however, argue that they provide crucial liquidity to the markets and are not disruptive. More on Reuters [...] Two former employees of Bernard Madoff’s investment firm about to go to trial for aiding the scheme were accused of improperly accessing a Madoff company computer when it was locked down after the con man’s arrest. Jerome O’Hara and George Perez, both former programmers who worked at Madoff’s investment business, were charged in 2009 with helping Madoff conceal his scheme for more than 15 years using computer codes and algorithms. The two men are scheduled to go on trial with three other former Madoff employees on Oct. 7 in federal court in Manhattan. After Madoff was arrested, the trustee liquidating Bernard L. Madoff Investment Securities LLC kept O’Hara and Perez on as employees to ensure data was preserved, Assistant U.S. attorneys Matthew Schwartz, John Zach and Randall Jackson said today in a letter to U.S. District Judge Laura Taylor Swain. All Madoff computer systems were locked down and no one was allowed access to the servers that handled the investment advisory business, known as “House 17,” without prior permission, prosecutors said. More on Bloomberg [...] A U.S. securities industry watchdog has proposed new rules to monitor transactions in “dark pools” run on alternative trading systems (ATSs), rivals to traditional exchanges whose growth critics blame for less transparency in the stock market. More than a third of U.S. stocks are now traded through dark pools, most of which are run by banks and brokers and often have lower fees than exchanges. Originally aimed at minimizing the market impact of large institutional orders, dark pools now have average trade sizes in line with those on public exchanges. ATSs would be required to report weekly volume and the number of trades for each security under the rule proposal the Financial Industry Regulatory Authority (FINRA) filed on Sept. 30 with the U.S. Securities and Exchange Commission. Investors could use the information to better determine where to route their orders, said Tom Gira, head of market regulation at FINRA. More on Reuters [...] The United States Securities and Exchange Commission (SEC), the nation’s top securities regulator and financial watchdog, will stay open for business Tuesday during the federal government shutdown, a SEC spokesperson confirmed to TIME on Monday afternoon. All employees will be reporting for work, normal operations will continue, and there will be no furloughs. At least not yet. It’s business as usual, the spokesperson said. That could change, however, if the federal government shutdown drags on. More in Time Magazine [...] Plotting a pump-and-dump stock scheme? Waiting to trade on that hush-hush tip you got from a friend? Looking to corner the market on pork bellies? Now might be your chance for any and all of those shenanigans. The thousands of people who keep U.S. financial markets running smoothly and fraud-free could be on unpaid leave starting tomorrow, along with the National Park rangers that corral unruly grizzly bears and the scientists tracking deadly pathogens at the Centers for Disease Control and Prevention. A few days ago, Bart Chilton, head of the U.S. Commodity Future Trading Commission, said the shutdown could have “disastrous impacts” for consumers. “You can bet the do-badders are licking their chops,” his statement read. More on Bloomberg BusinessWeek [...] As if the victims of Bernard Madoff had not suffered enough, the Justice Department has now inflicted on them the albatross of Richard C. Breeden. Breeden was the chairman of the Securities and Exchange Commission in the term of President George H.W. Bush (1989-1993), in which capacity he claims a myriad of pettifogging advances in corporate governance rules. But he is perhaps best remembered for the SEC’s decision, under his watch, not to charge the then president’s son, George W. Bush, for selling $848,000 of stock in Harken Energy, shortly before an announcement of a larger than expected loss for that company and the erosion of its share price over the next year of 70 per cent, though it later recovered that decline. The issue is not so much whether the future president got a free pass for an insider sale as whether Breeden had spared George W. Bush the usual frenzied legal assault because his father was Breeden’s boss. As one who has been subjected to the full panoply of Breeden’s misplaced fervor, I would certainly not reproach him this uncharacteristic act of restraint, and would not begrudge the future president the benefit of it; my impression is that Breeden did the right thing in that case, if for the wrong reasons. For most of his career, few who came into his cross-hairs were as fortunate. More in the Huffington Post Canada [...] |
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