Comments on: The cost of the insider-trading investigation http://blogs.reuters.com/felix-salmon/2010/11/26/the-cost-of-the-insider-trading-investigation/ A slice of lime in the soda Sun, 26 Oct 2014 19:05:02 +0000 hourly 1 http://wordpress.org/?v=4.2.5 By: skeptic2 http://blogs.reuters.com/felix-salmon/2010/11/26/the-cost-of-the-insider-trading-investigation/comment-page-1/#comment-21383 Tue, 30 Nov 2010 18:53:19 +0000 http://blogs.reuters.com/felix-salmon/?p=6317#comment-21383 These are billionaries, Who gives a damn that they loose money with crocks!

They cheated so they got what they deserve!!!!!!!!!!!!!!!!!!!

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By: Woltmann http://blogs.reuters.com/felix-salmon/2010/11/26/the-cost-of-the-insider-trading-investigation/comment-page-1/#comment-21354 Mon, 29 Nov 2010 17:55:25 +0000 http://blogs.reuters.com/felix-salmon/?p=6317#comment-21354 Are there any innocents involved in this story anywhere because I sure don’t see anny ..

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By: AnonymousChef http://blogs.reuters.com/felix-salmon/2010/11/26/the-cost-of-the-insider-trading-investigation/comment-page-1/#comment-21353 Mon, 29 Nov 2010 17:46:09 +0000 http://blogs.reuters.com/felix-salmon/?p=6317#comment-21353 “But does the existence of those investigations need to be made public, at least before any charges are brought?

These investigations are typically quite discreet for precisely that reason.

Remember it was Kinnucan himself that publicized that there was an FBI investigation, and that was clearly after a lot of work by the FBI anyway, by his own admission. I don’t recall seeing that the FBI had a press conference.

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By: wolphkaat http://blogs.reuters.com/felix-salmon/2010/11/26/the-cost-of-the-insider-trading-investigation/comment-page-1/#comment-21347 Mon, 29 Nov 2010 04:36:35 +0000 http://blogs.reuters.com/felix-salmon/?p=6317#comment-21347 Announcing investigations ahead of time does seem to take away some of the schadenfreude pageantry of it all… Imagine how much more captivating it would be if a news copter had live footage of a low speed police chase of hedge fund partners on a zamboni driven by al cowlings through the streets of greenwich.

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By: Lilguy http://blogs.reuters.com/felix-salmon/2010/11/26/the-cost-of-the-insider-trading-investigation/comment-page-1/#comment-21338 Sat, 27 Nov 2010 22:03:29 +0000 http://blogs.reuters.com/felix-salmon/?p=6317#comment-21338 Felix–

So the problems at FrontPoint are the FBI’s fault???

You must be kidding me!

If investors won’t stick with them until they’re proven guilty, that’s their problem. Since the FBI doesn’t move off the dime until it has a conviction in the bag, you can bet they will be found guilty.

Hopefully, people go to jail.

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By: Curmudgeon http://blogs.reuters.com/felix-salmon/2010/11/26/the-cost-of-the-insider-trading-investigation/comment-page-1/#comment-21327 Sat, 27 Nov 2010 17:10:57 +0000 http://blogs.reuters.com/felix-salmon/?p=6317#comment-21327 Felix, you seem to have an entirely uncharacteristic and unwarranted bee in your bonnet concerning police/FBI investigations involving financial firms. Perhaps I can add some perspective. There are tens of thousands of businesses outside of the financial industry that are dependent in whole or in part on their reputation. Such businesses, and individuals involved in those businesses are questioned by authorities on a regular basis. It has happened to me. How they manage their relationships with their clients/customers determines how well they fare as a result.

To say that the regulators put them out of business is factually incorrect, and on other occasions you would have called them on it.

It seems as though you are implying that financial businesses should get privileges in investigations not available to other businesses because, well, I’m not sure why. But if that is the case, you have become part of the problem. I would not have expected it.

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By: seanmatthews http://blogs.reuters.com/felix-salmon/2010/11/26/the-cost-of-the-insider-trading-investigation/comment-page-1/#comment-21326 Sat, 27 Nov 2010 15:04:02 +0000 http://blogs.reuters.com/felix-salmon/?p=6317#comment-21326 Hundreds of billions of damages? Isn’t that a bit strong. That implies that hundreds of billions of dollars of actual real-world value has been destroyed, where, at most, hundreds of billions of dollars of claims on real value have been redistributed. That value has either been redistributed from one bunch of rent-seekrs to another, or it has been redistributed into the real economy. The first, I am indifferent about, the second, I think is a good idea.

[yeah, I know this is simplistic, but it is a valid observation to a first approximation]

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By: DaDaDan http://blogs.reuters.com/felix-salmon/2010/11/26/the-cost-of-the-insider-trading-investigation/comment-page-1/#comment-21316 Sat, 27 Nov 2010 03:56:54 +0000 http://blogs.reuters.com/felix-salmon/?p=6317#comment-21316 Furthermore, it seems like in many cases the companies are self-disclosing the investigation’s existence, not the FBI. And, of course, if the FBI arrests someone, it be comes public record rather quickly.

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By: ErnieD http://blogs.reuters.com/felix-salmon/2010/11/26/the-cost-of-the-insider-trading-investigation/comment-page-1/#comment-21314 Fri, 26 Nov 2010 23:45:24 +0000 http://blogs.reuters.com/felix-salmon/?p=6317#comment-21314 Most of these hedge funds have terms and conditions so that they don’t have to send a check out for the entire withdrawal the next day unlike a mututal fund. Everybody involved in them knows that there will be some illiquidity that can backfire if the transactions need to be done quickly, but they are all big boys and girls and should be positioned to deal wit hthe consequences.

In the end, it is necessary for people and entities to believe that if they do something wrong there is a reasonable likelihood that they will be found out an punished. That by itself is a significant deterrent to bad behavior.

One of the biggest problems on Wall Street today is a belief in complete impunity as we are seeing with everything from Ponzi schemes, to the AAA subprime CDOs to the flouting of the law in the foreclosure processes. Until people in those various financial sectors really start to see businesses and people going down in investigation and bankruptcies, their interest in following the law instead of making a buck will be miniscule. While Sarbanes-Oxley is largely a toothless tiger with respect to the financial sector, I think the memories of Enron prosecutions etc. have prevented many regular businesses from sailing too close to the wind on financial issues.

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By: absinthe http://blogs.reuters.com/felix-salmon/2010/11/26/the-cost-of-the-insider-trading-investigation/comment-page-1/#comment-21313 Fri, 26 Nov 2010 23:05:57 +0000 http://blogs.reuters.com/felix-salmon/?p=6317#comment-21313 You make it sound like the social costs have been in the hundreds of billions of dollars, which is ridiculous. These are just redemptions. Maybe there are fire-sale inefficiencies from the changes in position, but it’s not at all clear how big this effect is. This money is probably just moving from one hedge fund to another.

It sucks to lose your business as a result of investigations like this, but I think there’s a net social gain. It doesn’t suffice to just focus on the costs.

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