The personal price of exposing financial wrongdoing can be devastating. Report for The Financial Times by William D Cohan, including interviews with whistleblowers formerly employed at Lehman Brothers, Deutsche Bank and JPMorgan Chase.
Why I Am Leaving Goldman Sachs. New York Time Op-Ed. March 14th 2012:
TODAY is my last day at Goldman Sachs. After almost 12 years at the firm — first as a summer intern while at Stanford, then in New York for 10 years, and now in London — I believe I have worked here long enough to understand the trajectory of its culture, its people and its identity. And I can honestly say that the environment now is as toxic and destructive as I have ever seen it.[more inside]
Is the SEC Covering Up Wall Street Crimes? "A whistleblower claims that over the past two decades, the agency has destroyed records of thousands of investigations, whitewashing the files of some of the nation's worst financial criminals."
Maybe Microsoft is trading in London at a penny less than it's trading at the same moment in New York. A high-frequency trader will buy shares in London and wait for them to rise. Since the discrepancy lasts a mere fraction of a second, speed is key. [Tradework CEO] M. Narang boasts it takes only 15 millionth of a second for his computers to place a buy or sell order after detecting an opportunity. Or, as he puts it, "If you try to pick up the penny, we'll probably beat you to it." [more inside]
SEC sues Goldman Sachs for fraud. GS has already come under fire for "betting against" financial products it was marketing, a practice that apparently helped it prosper from the real estate bubble but come out relatively unscathed. The SEC now says that one such product was designed specifically so that a Goldman business partner, Paulson & Company, could take a short position on it. Investors were apparently not advised of this fact. Goldman's stock was off more than 10% in the half hour following the announcement. [more inside]
Banning short selling? Firing Chris Cox? Treasury Secretary Paulson has reportedly floated the idea of an 80s-style "Resolution Trust Corporation." Maybe we're finally turning the corner...or at least stopping the hemorrhaging.
The wall seperating analysts and traders appears to have completely broken down in Merril Lynch. Yesterday, NYT reported that SEC is joining the investigation. The accounting scandal in QWest is now one of many in the telecommunication world. There is also the well documented travails of Anderson Consulting.... This year there has been a crop of accounting scandals. Does the financial world needs stricter regulatory mechanism or is it simply a matter of lax supervision? (more inside)
Invest now! The SEC has created a fake website to try and educate the naive. I can't decide if this is a good idea, or if someone has too much time on their hands and is wasting my tax dollars.