

A Dirty Business: New York City’s top prosecutor takes on Wall Street crime - yoseph
http://www.newyorker.com/reporting/2011/06/27/110627fa_fact_packer

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tzury
single page link instead of 12 parts.

[http://www.newyorker.com/reporting/2011/06/27/110627fa_fact_...](http://www.newyorker.com/reporting/2011/06/27/110627fa_fact_packer?currentPage=all)

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mkramlich
I bet this kind of thing is happening ALL the time on Wall Street. This is
just one particular case, one particular set of guys that got caught. I also
believe that one unofficial purpose of the existence of many CxO roles (at
large companies) and more especially Board seats, advisor roles, "strategic
consultants", and both banking and legal advice is to help make this kind of
insider info and quasi-legal information flow around to parasitic folks so
they can make profitable bets on it. Especially the modern _de facto_
aristocracy that exists.

There are just way too many people, pursuing their own self-interest, trying
to maximize the money they make, with too many easy ways for folks to
communicate or collude without a damning document trail, for this not to be
the case. It's human nature. Particularly the kind attracted to the Wall
Street kind of lifestyle and career.

The situation is complicated by the fact that the line is sometimes blurry
between a case where you can make an ethical bet versus an unethical one. A
legal bet versus an illegal one. Even supposedly ethical/legal investment is a
form of betting.

I'll also go on record as saying I think the true purpose of _some_ IPO's is
to serve as a veiled excuse to induce an event that will enable people within
that parasitic class to earn bucks from insider info bets. Not truly, and
especially not solely, to raise investment money from the public.

For any pedants who may come back with criticisms: note my use of qualifiers
like the word "some". I don't think it happens all the time, in all cases, and
I don't think everyone involved in Wall Street or on a corporate board or at a
consulting firm is necessarily unethical or doing these kinds of activities.
But I've seen tons of evidence over the years that suggests that it is both
common and _by design._

To sum up my take overall: Entrepreneurship and business good. Parasitic
financial shenanigans and aristocracy bad.

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oliveoil
One day, mathematicians will prove that any fund doing better enough than the
index must be insider trading. All those people from the 90s and 2000s, long
retired by then, will be convicted. It's like in cycling when they measure too
much hemoglobin in the blood they conclude the guy's doping. The funds'
financial records will be their frozen piss samples.

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sorbus
Or very lucky. Or good at spotting trends. Or going out of their way to notice
patterns indicative of insider trading on the part of other funds. Insider
trading is not the only way to do better than the index.

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xtreegold
Depends on the timeframe. If you consistently get lucky, you most likely
weren't.

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known
Rajaratnam could have roped in a Congress member. Insider trading is legal to
Congress <http://www.cnbc.com/id/43471561>

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temphn
The article lionizes prosecutors and demonizes Wall Street, even to the point
of quoting Eliot Spitzer on honesty. It also goes on and on about the
ethnicity of the accused in this case without ever mentioning the ethnicity of
many of the players in the mortgage crisis. Finally, it puts the entirety of
the blame for the crisis on Wall Street and cites Dodd Frank as good
legislation...and puts zero blame on the shoulders of Barney Frank, the CRA,
and the Bush/Clinton/Obama push for "affordable" minority housing.

George Packer has an agenda, and that agenda is not truth.

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dr_
You are correct that it lionizes prosecutors and demonizes Wall Street. The
article keeps shifting focus way too much - first it's about Galleon, then
about Preet, then the financial crisis, and it ends with a comment about
Goldman Sachs, with some implied cynicism on the part of the author.

I'm not sure if the blame should be put on Clinton/Bush for pushing affordable
housing however. At the end of the day, no one forced people to purchase a
home beyond their means, just like no one forced people to purchase stocks
during the late 90's tech bubble. It's a decision people made on their own.

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shareme
incorrect..sir..

When the regulatory bodies allow a no-doc loan for a house to be entered into
by the consumer they are in-fact complicit in fraud.. Uniform Commercial Code
already implies that such a loan as a contract is extremely leaning towards
fraud.

The biggest entities involved Bank lobbyists encouraging others to look the
other way rather than enforce laws and rules laready on the books

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mdda
This makes no sense. A no-doc loan is precisely that. If an applicant chooses
to lie, the government is not responsible.

If your claim is that the applicants are being encouraged to commit fraud (by
their local mortgage broker), then the government should start with regulating
mortgage brokers. That's where the rot started.

While it's natural for politicians to point fingers at their opponents, or the
Wall Street bogeymen, the reality is that neither party caused the massive
run-up in housing prices, and nor did Goldman Sachs.

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known
With HFT you can do Insider Trading.

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cannikin
tl;dr?

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sudonim
Tl;dr: The article documents "the largest insider-trading case in history"
where a hedge fund set up kick backs to individuals who provided the hedge
fund insider trading tips.

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rkalla
tl;dr v2: inside look at how Wall Street functions - these just happens to be
people that got caught.

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paulirish
luckily they did get caught. 11 pages in I was praying to FSM that they didn't
get acquitted.

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known
If you meet anybody from India, ask him 'What Is Your Caste?'

