New Yorker article on the Galleon prosecution
June 23, 2011 12:44 PM   Subscribe

A Dirty Business. New Yorker article on the prosecution of Raj Rajaratnam, head of the Galleon hedge fund. Previously: Matt Taibbi on Wall Street regulation and prosecutions.
posted by russilwvong (13 comments total) 11 users marked this as a favorite
Its a good article. But it doesn't have anything to do with much of anything Taibbi has written about. If there is a previously to link to its this.
posted by JPD at 12:55 PM on June 23, 2011

Look, I'll save everyone the trouble so we don't have to go through an entire thread debating the merits of Matt Taibbi:

Matt Tabbi is a bad man with daddy issues. He writes mean things about powerful people who engage in activities and professions that he does not understand because he envies them. Plus, his tone offends my delicate and refined sensibilities.

If he would just go away I could go back to reading this French novel I've been translating into English for my own edification, and our wise and infallible leaders in government could get back to cutting Medicare, Social Security, and education.
posted by eagles123 at 1:03 PM on June 23, 2011 [10 favorites]

oh please. that's just insulting to people who disagree with you about the merits of Taibbi's work.

Anywhoo - the NYer article is really some of the best work I've seen done on this subject - You know when I'm not translating Bossuet so I can compare and contrast his ideas with Burke's.
posted by JPD at 1:10 PM on June 23, 2011 [2 favorites]

I'm really sick of 'liberals' acting like if only there was someone who isn't too dirty (like Taibbi) or too brutally honest (like Chomsky) or too wry (Hitchens) , that conservatives or mainstream media would listen to them more.
posted by Cloud King at 1:26 PM on June 23, 2011 [7 favorites]

I never mentioned what I thought about the merits of Tabbi's work.

Would I exclusively rely on him for a detailed technical analysis of Wall Street regulations and businesses practices? No, but then again, that is not the purpose of his writing.

He is a "muckraker" and political satirist writing in the tradition of Hunter S. Thompson and Upton Sinclair. He writes for an entertainment magazine that puts Brittney Spears on its cover.

Frankly, I'm glad that there is someone like him out there that at least presents these issues to an audience that ordinarily might not be informed of them, in a way that grabs their attention.
posted by eagles123 at 1:27 PM on June 23, 2011 [4 favorites]

The real previously link - Meet Preet
posted by vidur at 1:28 PM on June 23, 2011

Related NPR story from today.
posted by exogenous at 1:52 PM on June 23, 2011

Terrific article, thanks. Also, the idea of "arbitrag[ing] reality" suggests that we're living in a Flann O'Brien novel.
posted by Sticherbeast at 2:56 PM on June 23, 2011

By the mid-aughts, hedge funds accounted for nearly half of all stock trades

"Mid-aughts"? Oh New Yorker, don't ever change.

I guess I should be thankful it's not "mid-aüghts"
posted by A Thousand Baited Hooks at 4:32 PM on June 23, 2011 [1 favorite]

> Related NPR story

Excellent radio interview about the New Yorker article, with Packer, who wrote that article.

The introduction:

"George Packer's article in The New Yorker follows the U.S. attorney for the southern district of New York during an insider trading case. In "A Dirty Business," Packer explores why it's been difficult to build prosecutions directly tied to the financial crisis. Packer talks to Steve Inskeep about what he's learned during his investigation."

The transcript and the audio file are at that link.
posted by hank at 5:48 PM on June 23, 2011

The Department of Justice also played a role in inhibiting vigorous prosecutions. In 2008, the department, under President George W. Bush’s Attorney General, Michael Mukasey, distributed the major new investigations across different offices. Countrywide went to the U.S. Attorney’s office in Los Angeles; Washington Mutual was claimed by Seattle; A.I.G. was pursued out of Washington, D.C., with the coöperation of New York’s Eastern District, in Brooklyn. Lehman Brothers was split among New Jersey and the Eastern and Southern Districts of New York. The Southern District, with its superior experience and expertise in accounting fraud, was largely cut out.

expand this paragraph and you get a good article.

In the spring of 2009, Congress authorized a hundred and sixty-five million dollars to be spent on more vigilant fraud enforcement. According to a recent article in the Times, only thirty million or so was spent.

Why? Answer this question and you have a good article.

In the spring of 2010, a respected prosecutor from the Southern District named Raymond Lohier, who had been running Bharara’s securities-fraud unit, was nominated for the position of an appeals-court judge on the Second Circuit. As part of the confirmation process, he met members of the Senate Judiciary Committee, and, according to Connaughton, Kaufman asked Lohier about his priorities at the Southern District, hoping to hear about financial-fraud cases. To Kaufman’s dismay, Lohier said that his top priority was cyber-security.

Cyber-security? You'd almost think there was a top-down consensus that there wasn't any fraud in the mortgage meltdown... why is this conventional wisdom and who believes this?

While he refused to comment specifically on the findings of any report, he answered generally that the damning evidence of an investigation can look very different upon closer inspection and when it comes up against the counter-evidence produced by a skilled defense in a criminal trial.
Bharara seemed equally frustrated by his inability to clear the high bars set up by criminal law and by his critics’ inability to understand why they exist. At times, he got caught in a defensive flurry: “People who did bad things, whether it’s criminal or otherwise, should get punished, there should be some comeuppance, right?” he said. “In any arc in a movie, when someone treated his or her spouse badly, you want to see that person pay for that later. Doesn’t mean it’s a criminal act. There are lots of bad people out there who I can’t charge criminally.”

Yes, I get it. But, when it seems like from the collapse of Lehman on there was an instant consensus that the job of the Feds was to save the major investment banks, not investigate them for fraud, you have to give me more details on why, really, there were no crimes committed.

I just don't believe it. What I learned from this article is that Galleon was run by a colorful character and that the trial was a sideshow.
posted by at 8:32 PM on June 23, 2011 [1 favorite]

"Why?" The answer is in the story itself in the New Yorker. Both of them.

You have people who want to be sure that when they leave the government service, the public sector jobs are there waiting for the very, very good moneies.

And then you have the businesses who buy and sell through the lobbyists. If we wanted to see just how much influence is had, we'd need to get visitor's logs and phone logs and cross-check them, to see which Congressbeast got what lobbyist visiting and then called what member of what agency. But I'm willing to bet straight up that there laws forbidding those sorts of things making it into the hands of the public.

It would be interesting to see, though. Very, very interesting.
posted by mephron at 8:50 PM on June 23, 2011

Great reporting, but has much changed?! Government still wholly underpays to get good people to make enforcement matter. Justice, SEC, FAA, FDA are full of regulators who can't wait but to cash in the $$$$-corporate sector, so why be a hard-ass about enforcing them? No rules to really prohibit free interchange between the two. The only saving grace is that such regulators have political ambitions to fuel their (needed) egos and they stay in government (like I hope Bhrara does).
posted by skepticallypleased at 5:49 AM on June 24, 2011

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