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Talking stocks, trading, and investing in general - Page 217

post #3241 of 6111
Quote:
Originally Posted by Concordia View Post

SMLP-- a newish energy MLP created by a very fine private equity shop that has every incentive to make its distributions and share price grow.

Does the PE shop still hold the GP interest?

post #3242 of 6111
Quote:
Originally Posted by RedLeg View Post

Does the PE shop still hold the GP interest?
Yes, and a good chunk of the LP interest also.
post #3243 of 6111
Just in case anyone's interested, here's the SEC Complaint in the Scott London (KPMG partner) insider trading case:

http://online.wsj.com/public/resources/documents/WSJ-SEC-London04112013.pdf
post #3244 of 6111
Quote:
Originally Posted by lawyerdad View Post

Just in case anyone's interested, here's the SEC Complaint in the Scott London (KPMG partner) insider trading case:

http://online.wsj.com/public/resources/documents/WSJ-SEC-London04112013.pdf

I work at KPMG and this was all everyone could talk about Tuesday morning. This guy is an idiot. He was the business unit partner in charge and was probably pulling down over $1M+ a year. Wtf was he thinking? He's going to lose his capital and partner pension which is probably at this point around $10M but this affair will cost the firm my guess is north of $100M.
post #3245 of 6111
Quote:
Originally Posted by Texasmade View Post


I work at KPMG and this was all everyone could talk about Tuesday morning. This guy is an idiot. He was the business unit partner in charge and was probably pulling down over $1M+ a year. Wtf was he thinking? He's going to lose his capital and partner pension which is probably at this point around $10M but this affair will cost the firm my guess is north of $100M.

 

When you see "Securities and Exchange Commission, Plaintiff," it's time to lurker[1].gif

post #3246 of 6111

^ Im guessing he had no idea how much trading his friend was doing.  $1.27m...lmao.

post #3247 of 6111
This was baffling to me, the kpmg partner did this for about 3 weeks pay? Unless I'm reading ths incorrectly, he did this for 50k and a Rolex?
post #3248 of 6111
Quote:
Originally Posted by SkinnyGoomba View Post

This was baffling to me, the kpmg partner did this for about 3 weeks pay? Unless I'm reading ths incorrectly, he did this for 50k and a Rolex?

He also had some fancy dinners and concert tickets.

facepalm.gif
post #3249 of 6111
I have no inside knowledge (biggrin.gif) of this case, but some general familiarity with how these things develop. There's at least some chance that he has been doing this for years, and has only been charged with the most recent and easiest to charge instances.

In terms of his relatively limited payoff, Dbear could be right. Often people think that if they keep things to a limited scale they can fly below the radar.

It's also the case, though, that people in these situations aren't making rational cost-benefit decisions. There can be some weird compulsive thing going on where the sense of getting away with something is more of a driver than the actual financial reward.
post #3250 of 6111
This is also one of these things where the SEC is not terribly good at catching people doing it, and not terribly good at prosecuting those they catch (or end up prosecuting people who are not technically guilty).

The key though...is they only have to catch you once. He could have been doing it for years, even gotten promotions based on bringing in business and getting high praise from people who are really just doing it in exchange for tips. But caught once for a few weeks pay and a rolex and its all over. You will never again be in a position to provide tips. Any income from tips they haven't noticed is gone, any income from your job (whether or not some of your success was related to your law breaking) is gone.

They don't have to be particularly good at catching people (and anyone who has ever read their filings or worked on a case knows they aren't), but their sanctions or criminal/civil convictions will ruin people. It is a deterrence play really...
post #3251 of 6111
Quote:
Originally Posted by otc View Post

This is also one of these things where the SEC is not terribly good at catching people doing it, and not terribly good at prosecuting those they catch (or end up prosecuting people who are not technically guilty).

The key though...is they only have to catch you once. He could have been doing it for years, even gotten promotions based on bringing in business and getting high praise from people who are really just doing it in exchange for tips. But caught once for a few weeks pay and a rolex and its all over. You will never again be in a position to provide tips. Any income from tips they haven't noticed is gone, any income from your job (whether or not some of your success was related to your law breaking) is gone.

They don't have to be particularly good at catching people (and anyone who has ever read their filings or worked on a case knows they aren't), but their sanctions or criminal/civil convictions will ruin people. It is a deterrence play really...

Not sure what standard you're using for "terribly good", or what data you're relying on. I've read many filings and worked on numerous insider trading cases. You're entitled to your views, obviously. But the invocation of supposedly superior knowledge doesn't really work. I know lots of people who have worked the defense or prosecution sides of those investigations and cases who would disagree with you, so I assume "anyone" in this instance really just means "me and everyone who agrees with me". And yes, of course it's a deterrence play. With limited resources and the like, it has to be.

Also , you may know this - it's not entirely clear from your comments -- but the SEC lacks the authority to bring criminal charges.
post #3252 of 6111

I always thought the sec was pretty good at catching people, and they even go after really small stuff like $30K.

post #3253 of 6111
I was just trying to comment on the common perception that the SEC are a bunch of bumbling fools who can't do anything right (like that lawyer who spent his days filling hard drives with porn).

My friends who are in finance/trading all seem to be of the opinion that there is stuff going on all of the time and the SEC can't catch anyone. I was just pointing out that they don't have to catch everything, they just have to catch the repeat offenders eventually which will shut them down and spook other people who would consider insider trading. The SEC doesn't have to have a high success rate because even a pretty low hit rate makes it likely to get caught eventually, and once someone gets caught, they will have a tough time ever successfully insider trading again.

The SEC is overworked and doesn't have a ton of money to throw at lower profile lawsuits (so they're not going to have strong experts or lawyers). Maybe it doesn't generalize as well to insider trading--I've been through far more securities fraud complaints than insider trading--but when things get complicated, the SEC seems to struggle. Slam dunk cases shouldn't be a problem, and slam dunk cases on unsophisticated small-timers are pretty common.

FWIW, I think the SEC is doing a decent job--doing so just doesn't require them to catch every suspect trade and win every complicated case. Its not like they are trying to stop serial killers--they can afford to wait until someone gets careless and make the strongest possible cases.

edit: and forgive me, it has been a couple of years since looking at this kind of stuff (and IANAL) so I had forgotten that the SEC cannot bring criminal charges.
post #3254 of 6111
Quote:
Originally Posted by otc View Post

edit: and forgive me, it has been a couple of years since looking at this kind of stuff (and IANAL) so I had forgotten that the SEC cannot bring criminal charges.

You're not alone in that. Lots of folks -- including lots of lawyers - don't know that the SEC can't bring criminal cases. It's actually one of the real handicaps the SEC faces when battling criminal fraudsters like ponzi schemers. The inability to impose criminal penalties significantly reduces the deterrent effect to people who are outright crooks (as opposed to established professionals with careers to lose). They can refer cases to the criminal authorities, but the criminal prosecutors often have other priorities (serial killers, for example smile.gif). If your career consists of being a grifter, the threat of judgment requiring payment of disgorgement and penalties and prohibiting future misconduct (which you probably will just ignore) may not be particularly worrisome.

The SEC also lacks the ability to use some of the investigative techniques the FBI uses, like wiretaps and undercover agents. Aside from whistleblower-type tips, the SEC's key sources of insider trading cases come are: market surveillance reports conducted by FINRA and other SROs (who run all sorts of screens and reports to look for unusual market activity), similar data mining by the agency itself, and referrals from the agency's exam program arising from examinations of broker-dealers, investment advisors, and similar regulated entities.

FWIW, the SEC (like most government agencies) has in-house trial lawyers who handle its litigation, so it doesn't need to hire lawyers when it brings a case. Expert witnesses can be trickier, but in major cases it hires top-flight experts. But you're certainly correct about its having to pick its battles.
post #3255 of 6111
AAPL

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