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Ultimate “Insider Trading” Is a Job for Serpico

By Larry Doyle on February 29, 2012 at 5:33 PM in Current Affairs

Have you seen this FBI PSA on your TV recently? Below, NoQuarterUSA contributor Larry Doyle comments on the FBI’s effort to warn Americans about insider trading and the dangers of white-collar crimes.

Michael Douglas? Have we gone totally soft?

Does America need to call on Michael Douglas, as the FBI recently did, to promote that “greed really is not good”?

Call me unimpressed.

Who would Sense on Cents like to see as the 2012 face to counteract insider trading activity on Wall Street? Not Michael Douglas, but more on this later.

There are many others to whom America might care to listen to understand basic virtues and values. That said, while many in America may be somewhat amused to see Douglas’ face on the Wall Street Journal’s front page, let’s get a little more serious on this topic of insider trading.

Insider trading on Wall Street circa 2012 encompasses activity engaged in by hedge fund traders who reside largely outside of the true inner sanctum of Wall Street. How might insider trading activity be defined for those who actually work within Wall Street’s innermost circles? Could we call it “insider insider trading”? Perhaps “extreme insider trading”? Personally, I like the catch phrase, “ultimate insider trading“.

Aside from the case entangling Goldman Sachs’ board member Raj Gupta, we do not seem to witness a lot of “ultimate insider trading” on Wall Street. Why is that? Are they all good little boys and girls? Are they just smart enough not to get caught? Are they protected and might they get tipped off? Who knows, but it is hard to believe that virtually ALL of the recent insider trading activity simply encompasses individuals within hedge funds and hardly ever enters directly into the large Wall Street firms . . . or even deeper.

One situation that I believe continues to scream for attention but was NEVER properly addressed by the Wall Street police, aka the SEC, is the liquidation of ~$650 million auction-rate securities from the portfolio of Wall Street’s self-regulator FINRA mere months before that market segment totally froze in February 2008.

I first addressed this “incredible” sale back in early 2009 and have addressed it extensively since then. I believe I connected more than enough dots in late 2010 to warrant an SEC investigation of this ARS liquidation by FINRA. I wrote then and welcome repeating now, How Did FINRA Know the ARS Market Was Failing Well Before 2007?:

Going on five years from the issuance of this Cease and Desist, and almost three full years from the date when the ARS market totally failed AND ~$135 BILLION of ARS still remain frozen. Along with those funds remaining frozen, so do the lives of so many individuals who were counting on their ‘cash equivalents’ to fund education, pay for retirement, and so much more.

While those individual lives are frozen, the regulator FINRA charged with protecting investors and overseeing those broker-dealers SOLD its own portfolio holdings of $647 million ARS mere months before the ARS market froze.

Who in our nation is calling FINRA to account? Who in the media? Who in the government?

Does anybody in those power structures have the balls to take on FINRA?

The dots are all connected.

Let’s see FINRA’s trade ticket.

This is America?

Michael Douglas? Come on.

Who should the FBI have rolled out? In light of all that has transpired on Wall Street and in Washington over the last few years, more and more Americans would care to see Al Pacino as Serpico….!!

Four full years since the ARS market failed. We STILL need to see FINRA’s ARS trade ticket.

Larry Doyle

– Originally published at Larry’s blog, Sense on Cents.

  • Anonymous

    I wonder what hedge fund Michael uses?  And why does he use it?  Probably not because he was told that they were “scrupulously fair.”

  • Anonymous

    This commercial is a total waste of taxpayer money. Did the FBI even consider that Mr. Douglas is an actor? He makes a living pretending. Well, so does Obama. So I guess I answered my own question.

    • Anonymous

      I think its another violation of fed law.  It really is a political ad, to remind of their preferred attack (first brought out by Newt) that Romney is a vulture capitalist like Gordon Gekko.  Never mind that venture capitalists like Romney practiced it at Bain are the exact opposite of vulture capitalists.

      • Anonymous

        Bain was and is a LBO firm… The VC is secondary…. Still its really meaningless to DC politics.

  • Anonymous

    OT but this is horrific.  And we haven’t even left yet.  Alghthough these beheadings were against men, I feel for the women of Afghanistan.  How can people be so backward.

    Beheadings Raise Doubts That Taliban Have Changed

    http://www.nytimes.com/2012/02/24/world/asia/beheadings-in-afghanistan-are-grim-reminder-of-extremes-of-taliban-law.html?_r=3

  • Anonymous

    Thanks, Larry. I was interested to see what the point of this was and I see that they are soliciting tips on illegal insider trading.
    Hopefully this might put people with fiduciary duties on notice that someone might turn them in.
    But it would be much more effective if they could get the Justice Department to follow up with some convictions.

  • Anonymous
  • Anonymous

    There is only one department in the FBI larger than investigations…. Public Relations….

    Larry… What’s you take on this article?
    20 Economic Statistics To Use To Wake Sheeple Up From Their Entertainment-Induced Comas
    http://theeconomiccollapseblog.com/archives/20-economic-statistics-to-use-to-wake-sheeple-up-from-their-entertainment-induced-comas

    • Larry Doyle

      All great points and all being covered up by a Federal Reserve  that has doubled the size of its balance sheet in order to goose the markets and disguise the MASSIVE structural changes ongoing in our economy and our nation. 

      • Anonymous

         Thank you…. We are in for a world of hurt……

  • Anonymous

    LD,

    Too bad your Bush Republican Party completely underfunded the SEC to the point that they could not really do their job. They also picked an endless stream of corporate lackies or Wall Street insiders to run the SEC.

    Obama has tried to majorily increase the SEC’s budget and put people in charge who will actually enforce the law. Today the SEC has never been so active in prosecuting “insider trading”. Ask Raj Rajaratnam.

    Micheal Douglas as a well know name and someone who came to represent the greed of Wall Street (and his Gekko character was a hero to some on Wall Street) is a good figure head for a PSA.

    • Larry Doyle

      “My” Bush Republican party?? 

      Registered Independent right here….but thanks for writing!!  

      Perhaps you may care to read some more of what I write about the incestuous nature of the Wall Street-Washington relationship. You might be busy BUT I guarantee you that you will learn a LOT. 

      http://www.senseoncents.com/?s=wall+street+washington+incest+ 

      Stop with the simplistic and cursory slander. Get educated!! 

      Larry Doyle Sense on Cents
      http://www.senseoncents.com/ 

      • Anonymous

        Did you vote for Bush? If you did, then the Republican Party was your party. You certainly do nothing, but support the Republican Party and a “conservative” point of view and tear into the Democratic Party with your comments, so I would say it is your party, no matter what your registration. Quacks like a duck…

        No interest in your blog/website, given the quality and bias nature of your posts on NQ over the years. As an investor or someone giving investors advice, you should be a little more objective, as investment decisions made through the prism of an ideological bent is usually bad investment advice.

        By the way if it was up to your Republican buddies there would be no SEC, no Micheal Douglas PSA, or any regulation on Wall Street. They want to gut even the relatively lame Frank-Dodd legislation. Even Greenspan or Mr. Ayn Rand admitted that he was wrong and Wall Street needs to be regulated.

        And yes Wall Street is too much in control in Washington. Both controlling Democrats and Republicans, but it is clear that the Republicans go to bat for Wall Street significantly more than Democrats. There are very view in the Republican Party who have even criticized Wall Street. However, you can find many many more Democrats trying to pare back the influence of Wall Street and trying to put some regulation on that sector. Lets hope Elizabeth Warren wins.