If Big Enough, It’s Not Criminal

Wall Street Exec. No Evidence for Criminal Charges. Surprised?

by Rodger Malcolm Mitchell, www.nofica.com

This goes under the heading, “Same old, same old: Too big to jail.”  (Caption graphic and emphasis added by Econintersect.)

The Wall Street Journal
SEC Files Civil-Enforcement Action Against SAC Chief Cohen
By Jean Eaglesham and Jenny Strasburg

The Securities and Exchange Commission filed a civil-enforcement action against SAC Capital Advisors LP chief Steven A. Cohen, alleging he ignored “red flags” that should have alerted him to insider trading “under his watch.”

Concerning insider trading, the SEC – at the Stamford, Conn., hedge-fund firm – said that Mr. Cohen –

“failed to take reasonable steps to investigate and prevent.”

The SEC is seeking to bar Mr. Cohen, one of Wall Street’s most high-profile investors, from overseeing investor funds.

Federal prosecutors have concluded they don’t have enough evidence to file criminal insider-trading charges against him before a five-year statute of limitations expires at the end of the month.

It’s been five years that this guy has made millions by failing to prevent insider trading, but gosh darn it, in five years of looking, we simply can’t find enough criminal evidence, and now the statute of limitations will expire. Oh, woe is us.

It’s not that we didn’t want to jail him — well, yes it is. The Obama administration never jails big contributors. But we want you to know how sad we are.

The move is the first time regulators in the investigation have brought an action against Mr. Cohen personally. His firm has been the subject of a long-running investigation into insider-trading that has resulted in criminal charges against a number of traders and others with ties to SAC.

But, while trading involving Mr. Cohen has been cited in government documents related to those cases, he hasn’t been criminally charged in those matters or any other.

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“It’s the first time, but gee, we didn’t know he even existed. You say he’s been the head of this firm all these years? Wow! We never knew.”

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…And gosh darn it, now, just when we’re about to get the criminal evidence on him, the statute of limitations will expire. Wouldn’t you know it?

SAC recently agreed to pay $616 million to settle two SEC insider-trading cases involving the firm’s employees. The firm didn’t admit or deny wrongdoing in agreeing to the settlements. SAC has said Mr. Cohen and his firm acted appropriately.

Doesn’t every firm that “acts appropriately” agree to pay $616 million? Nothing criminally wrong here, folks. Yes, we know that fines don’t mean anything to these firms — just a cost of doing business. But we didn’t think you knew it.

A spokesman for SAC said in a statement that –

“The SEC’s administrative proceeding has no merit. Steve Cohen acted appropriately at all times and will fight this charge vigorously.”

Of course our Mr. Cohen and we at SAC acted appropriately. We paid the $616 million because we felt the SEC could use the money. That proves what nice people we really are.

The spokesman said that the SEC is ignoring SAC’s –

“exceptional supervisory structure, its extensive compliance policies and procedures, and Steve Cohen’s strong support for SAC’s compliance program.”

Yes, we at the SEC see that SAC’s own PR flak now has admitted Cohen was strongly involved in the crooked compliance program (as he is required to be), but that doesn’t mean he’s guilty of anything — at least not for two more weeks, when the statute of limitations runs out.

The SEC alleges Mr. Cohen ignored “highly suspicious information” that should have prompted “any reasonable hedge fund manager” to investigate.

Andrew J. Ceresney, co-director of the SEC’s Division of Enforcement, said in a statement that –

“Hedge-fund managers are responsible for exercising the appropriate supervision over their employees to ensure that their firms comply with the securities laws.”

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“I, Steve Cohen, am using the Sgt. Schultz defense: ‘I see nothing; I hear nothing; I know nothing.’ Here’s $616 million. We’ll make it back in a month. But remember, if you want future campaign contributions, leave me alone.”

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Ceresney said,

“After learning about red flags indicating potential insider trading by his employees, Steven Cohen allegedly failed to follow up to prevent violations of the law.”

Oops, forgive the typo. That should have read: “After learning about red flags indicating potential insider trading by Cohen’s employees, the Security and Exchange Commission failed to follow up to prevent violations of the law.”

Uh, Mr. Cohen, please remember there will be an election next year. May we count on your continued and generous support?

Please, sir.

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Mitchell’s laws:

• The more federal budgets are cut and taxes increased, the weaker an economy becomes.
• Austerity is the government’s method for widening the gap between rich and poor, which ultimately leads to civil disorder.
• Until the 99% understand the need for federal deficits, the upper 1% will rule.
• To survive long term, a monetarily non-sovereign government must have a positive balance of payments.
• Those, who do not understand the differences between Monetary Sovereignty and monetary non-sovereignty, do not understand economics.
• The penalty for ignorance is slavery.
• Everything in economics devolves to motive.

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Nine Steps to Prosperity:

1. Eliminate FICA (Click here)
2. Medicare — parts A, B & D — for everyone
3. Send every American citizen an annual check for $5,000 or give every state $5,000 per capita (Click here)
4. Long-term nursing care for everyone
5. Free education (including post-grad) for everyone. Click here
6. Salary for attending school (Click here)
7. Eliminate corporate taxes
8. Increase the standard income tax deduction annually
9. Increase federal spending on the myriad initiatives that benefit America’s 99%

10 Steps to Economic Misery: (Click here:)

1. Maintain or increase the FICA tax.
2. Spread the myth Social Security, Medicare and the U.S. government are insolvent.
3. Cut federal employment in the military, post office, other federal agencies.
4. Broaden the income tax base so more lower income people will pay.
5. Cut financial assistance to the states.
6. Spread the myth federal taxes pay for federal spending.
7. Allow banks to trade for their own accounts; save them when their investments go sour.
8. Never prosecute any banker for criminal activity.
9. Nominate arch conservatives to the Supreme Court.
10. Reduce the federal deficit and debt

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No nation can tax itself into prosperity, nor grow without money growth.
Monetary Sovereignty: Cutting federal deficits to grow the economy is like applying leeches to cure anemia.
Two key equations in economics:

1. Federal Deficits – Net Imports = Net Private Savings
2. Gross Domestic Product = Federal Spending + Private Investment and Consumption – Net Imports