The Hammer Is About To Drop On Wall Street

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PostMon Nov 22, 2010 8:15 pm » by Savwafair2012


The government is reportedly close to filing charges in the largest institutional insider-trading investigation in history.

According to initial reports, the investigation could ensnare Wall Street's biggest names: Goldman Sachs, SAC Capital, Wellington, Jennison, MFS Global, Maverick, Citadel, and others.



Massive Insider Trading Investigation Could Nail Wall Street's Biggest Names


The government is reportedly close to filing charges in the largest institutional insider-trading investigation in history.

According to initial reports, the investigation could ensnare Wall Street's biggest names: Goldman Sachs, SAC Capital, Wellington, Jennison, MFS Global, Maverick, Citadel, and others. (Here's a who's who of who might get nailed.)

The investigation reportedly focuses on "expert networks" -- consulting firms that pay industry participants to share insights and information with investors. Professional investors use these networks to gather information about real-time business conditions and trends in various industries (as well as, sometimes, information that could likely be characterized as "inside" information in any other context).

No matter where the investigation ends up, the government will likely present it as a huge step toward making the market "fair" for small investors. And the same small investors will likely view it as confirmation that the "game is rigged."

Both of these conclusions will miss a far more important point.

The REAL lesson most investors should take away from the largest institutional insider-trading investigation in history is that competition in the global financial markets is so intense that it's basically idiotic to trade.

Trading is what is known as a "zero sum game." To win, you have to beat the competition. (And you have to beat the competition by more than the amount that it costs you to trade, which is extraordinarily hard to do, especially after tax).

In our experience, most investors have no appreciation for how intense their competition is. They think, "Wow--look at all this information I have. Look at all my trading screens. Look at all my SEC filings. Look at my charts and graphs. Look at the smart fellow on TV telling me what to buy. Look at how many of my trades have made money!"

What they miss is that their competition has all this information, too -- so it doesn't give anyone an edge. They also don't understand that, in addition to all this information, the folks they are competing with have millions and millions of dollars to spend gathering information that will never be published anywhere or appear on an screen or chart or graph.

That's where the expert networks come in. That's where contact networks in general come in. That's where one-on-one meetings with managements and suppliers come in.

One glance from a CEO in response to a pointed question can contain more information than 500 pages of SEC filings. One nugget of scuttlebutt about the status of an important contract can make you more money than 500 hours of studying charts and graphs. Most small investors don't understand that their competition gets this sort of information all day long.

In short, it doesn't matter whether the trading game is played on "a level playing field" (and of course it isn't.) The New York Jets will still destroy any high-school football team, no matter what field the game is played on.

From the perspective of small investors, the game that is played every day in the global financial markets is equivalent to the New York Jets vs. a high-school football team. And it should be no mystery which team the small investors are playing on.

So what's the smart answer for small investors in a world in which the competition is so unbelievably intense?

Don't play the trading game.

Instead, play a game you can win.

What's that game?

Long-term investing, preferably via low-cost, tax-efficient index funds.

Unlike professional investors, small investors don't have to worry about their performance in a given week or month or year. They can avoid the second-to-second warfare that defines the professional investment business. They can be patient and allow Ben Graham's long-term "weighing machine" to eventually do its work.

If they do that, and keep their costs low enough, they'll outperform 75% or more of the professionals.

Just as important, they won't be willingly playing a game they are almost sure to lose.

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http://finance.yahoo.com/tech-ticker/ma ... et=&ccode=
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PostMon Nov 22, 2010 8:26 pm » by Thebluecanary


Woo hoo....get em! Get Goldman Sachs! They can put Martha Stewart's ass in prison, but these bandits can run amok with impunity? I'd love to see this happen, for real. The cynic in me doubts that it will tho.
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PostMon Nov 22, 2010 10:43 pm » by Ridee


great news thanks for sharing :)
My blog --- > http://uplifting7.blogspot.com/

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PostMon Nov 22, 2010 10:50 pm » by Nyarelathodep


The whole QE series of events might be the tipping point for people to understand what goldman sachs has been up, how they are tied into the Fed, and why they need to become a non-entity. Until the masses understand what money actually is, they cant even begin to understand how they are being manipulated...and that is the only thing standing in the way of true finacial reform.
For challenges to come, we stand against the tide...under the banner of the brave. Mission Aetheria...the future belongs to the brave.

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PostWed Nov 24, 2010 7:09 pm » by Savwafair2012


Feds turn up heat on Wall St., raid 3 hedge funds


FBI raids 3 hedge fund offices in Conn., NY, Boston as feds turn up heat on Wall Street

Federal investigators have turned up the heat on Wall Street, raiding three hedge funds in what one of the targets called a wide-ranging probe of insider trading.

The FBI on Monday searched the New York offices of Level Global Investors LP, and the Stamford, Conn., headquarters of Diamondback Capital Management LLC, a law enforcement official said. The official spoke on condition of anonymity because he was not authorized to discuss an ongoing case.

Another FBI official said the agency also searched a third site, at 30 Federal St. in Boston. Hedge fund Loch Capital Management LLC has its headquarters at that address.

The FBI said in a statement that it had executed search warrants in the three states "in an ongoing investigation." Agency spokesmen said they could not comment further because the court documents are under seal.

A spokesman for Level Global acknowledged the raid took place.

"We can confirm that agents from the Federal Bureau of Investigation visited our offices this morning as part of what we believe to be a broader investigation," the spokesman said in a statement.

Four men wearing overcoats and badges emerged late Monday from the Level Global offices in midtown Manhattan, pulling rolling suitcases behind them and carrying nylon backpacks. They declined to answer reporters' questions.

In Stamford, security guards ordered journalists to leave the premises of the high-rise building housing the offices of Diamond Capital Management. Three men were seen leaving the building in an FBI vehicle on Monday evening.

The raids rattled Wall Street and bank shares slumped Monday as news of FBI action spread. Goldman Sachs Group Inc. sank 3.4 percent, while Bank of America Corp. fell 3.1 percent. Several white-collar defense lawyers in New York said they were bombarded by calls from traders seeking representation.

The FBI and other law enforcement agencies are investigating insider trading by hedge funds, mutual funds and investment bankers, the Wall Street Journal reported this weekend. The companies allegedly earned tens of millions in illegal profits using secret information about mergers, according to the Journal.

Diamondback and Level Global both are run by former managers of SAC Capital Advisors LP, of Stamford. Diamondback manages about $4.71 billion, according to public filings. Level Global manages $3.09 billion, filings show.

Loch Capital is run by brothers Timothy and Todd McSweeney. The brothers have been linked in news reports to hedge-fund manager Steven Fortuna. Fortuna pleaded guilty last year to charges stemming from an earlier insider trading investigation by the Securities and Exchange Commission.

Workers at Loch Capital declined to answer calls placed by a reporter through the office building's intercom on Monday. A worker at the building who declined to be identified said the McSweeney brothers left their offices at around noon and did not return.

The raids come a month after U.S. Attorney Preet Bharara in Manhattan told the New York City Bar Association that white-collar crime was on the rise, carried out by Wall Street heavyweights who consider inside information "a performance enhancing drug that provides the illegal 'edge' to outpace their rivals and make even more money."

Bharara said his office and the FBI had both recently added more resources to exposing insider trading and considered it a top criminal priority.

"Disturbingly, many of the people who are going to such lengths to obtain inside information for a trading advantage are already among the most advantaged, privileged, and wealthy insiders in modern finance," he said last month.

Diamondback portfolio manager Andrea Feinstein declined to comment about the search. A spokesman for the SEC did not respond to requests for comment.

Calls to Loch Capital were not returned. Leonard Pierce, a lawyer for the fund, did not return a call seeking comment.

http://www.rawstory.com/rs/2010/11/feds ... dge-funds/
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PostWed Nov 24, 2010 10:30 pm » by Koopatroopa


Maybe these investigations are apart of the plan to create fear in the markets to crash them. Just a guess though.

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PostWed Nov 24, 2010 10:37 pm » by Troll2rocks


Yeh betcha this fall silent soon.
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PostWed Nov 24, 2010 10:40 pm » by Mystery747


koopatroopa wrote:Maybe these investigations are apart of the plan to create fear in the markets to crash them. Just a guess though.


I agree. That's the same people who pay the FBI. Would not be in the FBI's best intrest to investigate the people who they work for. Probably a cointel pro for the underprivileged to think that there is justice in this unjust world. :hiho:

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PostWed Nov 24, 2010 10:59 pm » by Marley


China, Russia quit dollar in trade settlement.
http://english.peopledaily.com.cn/90001 ... 08831.html
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PostWed Nov 24, 2010 11:02 pm » by SamueltheLion


"...everything that is hidden will be revealed..."

lololololol.
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