October 2011

Less than a week after a federal court in Manhattan sentenced hedge fund boss Raj Rajaratnam to a record 11 years in prison for insider trading, and ordered him to pay forfeiture and fines of more than $60 million, comes the news that Citigroup has agreed to pay $285 million to settle a to settle a civil complaint by the Securities and Exchange Commission that it had defrauded investors. According to last Thursday’s New York Times,  “the transaction involved a $1 billion portfolio of mortgage-related investments, many of which were handpicked for the portfolio by Citigroup without telling investors of its role or that it had made bets that the investments would fall in value.” This is the third such complaint brought by the SEC. In July 2010 Goldman Sachs paid $550 million to make the SEC’s charges go away, and this past July JP Morgan Chase settled its case with a payment of $154 million. None of the three firms has admitted any wrongdoing, and neither the firms nor any of their employees have been charged with any crime. [click to continue…]

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It’s hard not to feel sympathetic towards the people occupying Zuccotti Park in lower Manhattan and their brethren who have mounted similar protests in cities and on college campuses across the United States. There is a pervasive sense in our country that something is wrong, and that Wall Street financiers have something to do with this sorry state of affairs. One of the charms of the movement is its lack of specific policy demands; once the occupiers come up with a manifesto they become just another interest group, hardly different from the “Republicrats,” whose pettiness and dithering have prevented Congress from enacting any sensible solutions to our current and future economic woes. But so far, the Wall Street occupiers have been eloquent, if misguided, about what they are against, and relatively clueless about what they are for. [click to continue…]

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