Professor John Coffee of Columbia Law School, who is considered one of the foremost legal scholars in the securities area, discusses the effect of the conviction of Galleon Group co-founder Raj Rajaratnam on insider trading:
“People learn deterrence from actual vivid examples of people going to prison. And that is what it takes in every generation to overcome the tremendous temptation to make tens of millions of dollars.”
What about the municipal market? Are there instances where dealers are receiving inside information and trading on it ahead of others?
Raj Raj is a warning to all market participants.
Crushing pension costs
We keep hearing how it’s teachers that are raking in the big pensions. But Bloomberg reports on a stunning example of politicians lavishing pension benefits on firefighters in California, and now to afford these pension payments they have to lay off workers:
A 2007 arbitration ruling letting San Jose, California, firefighters retire as early as age 48 with 90 percent of their pay may result in the firing of 370 municipal workers as the 10th-largest U.S. city tries to close a budget deficit fueled by higher pension costs.