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Rico. Suave. Wheel of Justice Grinding Away...

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Posted by:   bobo 10/23/2007 1:57 PM

SAC Capital got handed their head in the FFH suit against them, alleging a widespread criminal conspiracy to manipulate their share price using virtually every dirty trick in the book.

The suit is very similar to the one OSTK has going against Rocker Partners and Gradient. In fact, I believe that Gradient is in the SAC suit as well. I get so confused, they are named in so many suits alleging dirty deeds and criminal conduct and such, and it is so hard to keep up on which suit is proceeding against them and where...

Anyhow, this is particularly relevant as it uses the RICO word, and all sorts of other ugly words, to describe a large scale fraud by short sellers.

Huh.

Not saying it is true, but if it is, and discovery proves it to be true, this is the end of the world for a lot of bad guys. FFH has the muscle to take this to the finish line, and the free speech stalling won't play here.

Couldn't happen to a nicer bunch of guys.

Sorry I've been remiss in posting blogs, but I have a whirlwind of activity going on at the moment, and not much time to do anything but keep up. Hopefully that will slow shortly, and I can resume my little pieces.

Copyright ©2007 Bob O'Brien
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Comments (20)
Re: Rico. Suave. Wheel of Justice Grinding Away... By Alan DeGracia on 10/23/2007 8:10 PM
Glad to see your posting.

I like the ring of that RICO word, it opens a lot more questions don't ya think?

alan
Re: Rico. Suave. Wheel of Justice Grinding Away... By bbhindyou on 10/23/2007 8:10 PM
Happy day.
Much too long in comming,but happy day.
Too bad the money is gone and no one will get it back or even be able to know where it went.
What is justice?
Re: Rico. Suave. Wheel of Justice Grinding Away... By olfeller on 10/23/2007 8:10 PM
RICO is a legal quagmire, not intended to supplant existing security laws (state or fed), not applicable offshore, etc., etc. But it sure sounds good. If they are invoking RICO they must have tons of dots connected.
Re: Rico. Suave. Wheel of Justice Grinding Away... By Sean on 10/24/2007 12:03 PM
You mean that these miscreants really can't buy all the judges, now that is a big surprise to me and I am sure a lot of others!!! I wonder what would have happened if FFH did not withstand the barrage of attacks it faced, I guess it would have been another scam huh? To all those companies that did'nt make it I salute you. Hopefully the will get their just desserts as Mr. Frobisher did tonite on the FX series "Damages"
Re: Rico. Suave. Wheel of Justice Grinding Away... By Great White North on 10/24/2007 12:04 PM
Some Canadian brokerages are making all OTC stocks "sell only" effective with the implementation of the new Grandfather rules. They've also banned the deposit of OTC share certificates. Even though the Canadian market is highly regulated, there is a loophole where there is almost no regulation of settlement if the company is not a reporting issuer in Canada.
Re: Rico. Suave. Wheel of Justice Grinding Away... By bobo on 10/24/2007 12:10 PM
What's interesting to me is that several years ago, when I went down the rabbit hole and started blogging, I posited that the large banks had to be carrying massive liabilities off balance sheet, perhaps in special purpose entities, effectively creating massive securities violations as well given that it deceives the public as to the true nature of the potential fallout, i.e. material risks.

Now we see bank after bank imploding with, you got it, off balance sheet issues due to derivatives and subprime liabilities. Makes one wonder what else has been stuck in the grab bag of off balance sheet problems they decided to keep off the books? Maybe a hedge fund or two carrying massive NSS liability? OR how about swaps with other brokers wherein I offset my $20 billion liability with a swap for your $20 billion liability, netting to zero and thereby hiding the gargantuan extent of the problem?

I'm quite sure that it is far more elaborate than that, however it is interesting to see that the basic mechanism I suggested as the preferred way to hide the warts is in effect the one that they used here. Huh. No wonder I am so popular with Wall Street. That's gotta be fun, having a holiday rodent telling the world years in advance how your best schemes actually work, based on nothing more than an educated guess as to how it had to work....
Re: Rico. Suave. Wheel of Justice Grinding Away... By Ted on 10/24/2007 1:30 PM
They used to say it was a wild conspiracy theory to suggest that silver and gold was failing to deliver and that the price was manipulated to protect fiat currencies.

Now it is proven conspiracy fact.

http://news.silverseek.com/TedButler/1193161018.php

"A reader, who held silver in 1000 oz bars, requested Morgan Stanley provide him with the serial numbers and weights of his bars, on which he had paid storage and insurance fees for many years. He was given the run-around and not the serial numbers and weights. I am aware of this through e-mail exchanges with him. I told him that the only plausible reason they wouldn’t give him the information was because the bars did not exist. He contacted a lawyer and that ultimately resulted in the class-action settlement, after years of legal wrangling."
Re: Rico. Suave. Wheel of Justice Grinding Away... By Ted on 10/24/2007 1:30 PM
Can we go after the auditors that didn't disclose that these public company statements failed to disclose off balance sheet risks? Can we force the auditors to disclose them going forward. Transparency and sunlight are great antiseptics.
Re: Rico. Suave. Wheel of Justice Grinding Away... By n-tres-ted on 10/24/2007 4:15 PM
“I hope that this didn’t happen because it’s a scheme of tremendous proportions,” said Judge Wilson in the hearings two weeks ago. She rejected motions for dismissal and ordered the matter should proceed to trial under RICO, or organized crime, and other statutes.



It's very good news to see that the judge appears to understand the case and will look at the evidence with a clear eye. JMOO
Re: Rico. Suave. Wheel of Justice Grinding Away... By rtway on 10/24/2007 9:10 PM
For a while I thought that every ill gotten thing from the flu to forest fires was the result of sub prime loans. Now you confirmed what I have had in the back om head. That much of the fallout from the NSS is working its way down the food chain.Good to hear from you.
Re: Rico. Suave. Wheel of Justice Grinding Away... By Azkole on 10/24/2007 9:10 PM
Bobo,

Any commentary on the PIPES conference and Dr Byrne's presentation?
Re: Rico. Suave. Wheel of Justice Grinding Away... By theTurtle on 10/24/2007 9:11 PM
Maybe after Prem takes some of that artwork from Steve as payment in kind, he can drive it in further by listing some of it on Overstock Auctions. The thought of that does make me a little warm and fuzzy.

Not a bad idea really. Kind of like the Buffett/Glide lunch on Ebay, only this auction goes to benefit the American people.

theTurtle
Re: Rico. Suave. Wheel of Justice Grinding Away... By kevin on 10/25/2007 9:36 PM
For those who don't know the scum who owns SAC Capital. He sells you counterfeit securities, then uses the cash to buy paintings for his private museum.

"With a fortune estimated by Forbes at $6.8 billion, Cohen is the 47th richest American[4]. His $15 million house is 31,000 square feet and sits on 14 acres in Greenwich, Connecticut.[5] His 2005 compensation was reportedly $1 billion,[5] considerably higher than his 2004 compensation ($450 million) [19] and 2001 compensation ($428 million)[1] and 2003 compensation ($350 million) [20"

"In addition, in 2006 Cohen bought a landscape entitled "Police Gazette” by artist Willem de Kooning for $63.5 million from David Geffen [15]. Also in 2006, Cohen attempted to make the most expensive art purchase in history when he offered to purchase Picasso's Le Reve from casino mogul Steve Wynn for $139 million. Just days before the painting was to be transported to Mr. Cohen, Mr. Wynn, who suffers from poor vision, accidentally thrust his elbow through the painting while showing it to a group of acquaintances inside of his office at Wynn Las Vegas. The purchase was cancelled, and Mr. Wynn still holds the painting. Nora Ephron has written an eyewitness account. In November 2006, Cohen purchased another Willem de Kooning painting, Woman III, from David Geffen for $137.5 million [16]."

"Cohen began collecting art in 2000, and over the past several years has become a prominent collector, appearing on Art News magazine's "Top 10" list of biggest-spending art collectors around the world each year since 2002,[2] and Forbes magazine's "Top Billionaire Art Collectors" list in 2005.[3] To date, Cohen has bought around $700 million worth of artwork [8]; in 2003, the New York Times reported that in a 5 year period, Cohen spent 20% of his income at art auctions [9]. He is reportedly building a private museum for some of his artwork on his Greenwich property [10]. In the winter of 2005 it became known that in 1999 Cohen had bought Edvard Munch's "Madonna". Reportedly this was for $11.5 million, a record price for any Munch painting to this date."
Re: Rico. Suave. Wheel of Justice Grinding Away... By Sean on 10/25/2007 9:57 PM
Bob, do you think RICO knows about this?


US SEC sees "rampant" insider trading on Wall St.
Reuters - October 25, 2007 1:35 PM ET


Related Quotes
Symbol Last Chg
AAPL Trade 183.33 -2.60
DJ Trade 59.80 +0.05
CFC Trade 12.64 -1.19
MS Trade 60.815 -2.075
BSC Trade 109.78 -3.76
Quotes delayed at least 15 minutes

By Rachelle Younglai

WASHINGTON, Oct 25 (Reuters) - A senior U.S. Securities and Exchange Commission official said on Thursday insider trading appeared to be "rampant" among Wall Street professionals and the agency has formed a working group to focus on it.

"I believe we're going to see more insider trading cases," Linda Chatman Thomsen, the SEC's enforcement director, told reporters on the sidelines of a securities fraud conference.

"I am disappointed in the number of cases we are seeing by people who make an abundant livelihood in the market that they are sort of abusing by insider trading," Thomsen said, referring to cases already brought against professionals this year.

Insider trading "appears to be rampant" among Wall Street securities professionals, she added.

Alice Fisher, assistant attorney general with the Justice Department's criminal division, echoed Thomsen's sentiment and said: "The number of insider trading cases don't seem to be going away."

During the past year, the SEC's enforcement lawyers have stepped up the pace of insider trading lawsuits and settlements. Some of its recent high-profile cases include charges against a husband and wife in Hong Kong stemming from their trades in Dow Jones & Co Inc (DJ) shares ahead of News Corp's $5 billion takeover bid, and guilty pleas from three former Countrywide Financial Corp (CFC) executives for trading in company shares in the days before a disappointing earnings report.

Also, in March U.S. prosecutors charged 13 people, including employees at top Wall Street banks UBS UBSN.VX, Morgan Stanley (MS) and Bear Stearns Cos Inc (BSC) in what they called one of the most pervasive trading rings since the 1980s. The SEC also brought civil charges against 11 people, as well as against three hedge funds.

Insider trading involving hedge funds is the focus of one of the four internal working groups the SEC has set up to tap expertise and coordinate efforts throughout the agency. The $1.8 trillion hedge fund industry guards its secrecy and complex trading strategies.

The SEC also has a working group looking at municipal securities, one focused on subprime mortgage lending issues, and a group examining stock options backdating by executives.

Thomsen expected more enforcement actions related to options backdating, but would not provide a time frame.

"There will be more to come," she told the securities law conference.

More than 180 companies have been investigated by the SEC or have conducted their own internal inquiries into possible manipulation of stock option grant dates.

The SEC has brought civil charges against former executives at several companies, including Apple Inc's (AAPL) former general counsel.

In the subprime lending area, Thomsen said there was a wide variety of potential violations, including disclosure issues and the packaging of the subprime loans. (Reporting by Rachelle Younglai)

Re: Rico. Suave. Wheel of Justice Grinding Away... By clearthinker on 10/27/2007 8:57 PM
Gee.....what a coincidence given the verba tongue lashing the SEC got from Specter sand Grassley over the Aguirre case....What Linda Thomsen needs to do is to make nice with Gary Aguirre and finish the prosecution of the Mack case....then we can talk about these other cases....


Oh and while you're at it Linda, dig out those journalist subpeonas......
Re: Rico. Suave. Wheel of Justice Grinding Away... By Sean on 10/27/2007 9:01 PM
This was an interesting post from Abadgoodgirl on Ragingbull.(I know Bob, your other favorite forum..LOL)

Oil.ipo, there is NO statute of limitations for anyone to worry about here.

The SEC, Federal Reserve & it stockholders and BOD's, DTCC & its stockholders, members of congress are liable and are both criminally responsible and wilfully negligent with malice and forethought for their perpetuation of crimes involving the biggest scandal perpetrated on investors of the world in the United States of America.

Did you know that recommendations from the Brady Commission, US GAO and the ISSA, among others gave instructions for mechanisms to be implemented to contain risk & reduce fraud.

late 80's early 90's countries were instructed to employ delivery versus payment method for settling all transactions and should be in place by 1992.

But the corrupt US Capital market, that dares to call itself the financial capital of the world (while omitting the real title of the headquarters which should call itself the most Corrupt Financial Capital of the World) deliberately did not implement this recommendation while knowing that it was perpetuating infinite losses and fraudulent acts upon unsuspecting investors with its unsynchronized (don't you love that term) payment and delivery as well as its basic "non delivery" of security method of settlment manifested by the unpatrolled and promoted questionable stock borrow program.

Thus the corrupt United States Capital Markets and its pathetic administration, perpetuated and permitted the destruction of 1000's of companies' share structure by lending shares for settlement of trades with the seeming intention of never delivering such security.

European bankers were bringing a huge negligence case against the United States for negligence asserting that the SEC failed to enfoce its regulations. The 2004 law suit was suing the SEC for 5 trillion dollars.

Certainly, the victims in the hedge funds which collapsed can do the same thing.

The United States till this day fails to implement Delivery versus Payment but it is supposed to implement the 1980 recommendation by Dec. 31, 2007....after the wilfull slaughter of thousands of companies and its stockholders.

These individuals should be led to 'old sparky' in cuffs without a trial and treated as enemy combatants, imo.
Re: Rico. Suave. Wheel of Justice Grinding Away... By stryker-ny on 10/29/2007 10:31 PM
Bunny...Is it time for a class action suit against the most corrupt, totally inept, criminally involved SEC in our nations history..I say let a jury decide....
Re: Rico. Suave. Wheel of Justice Grinding Away... By rtway on 10/31/2007 11:04 PM
One of the consequences of a failing society is apathy. Everyone becomes conditioned to " that's the way it is" and accepts it as normal behavior. Moral standards are dialed down love for fellow man and self esteem become rare. The Wall St. crowd and hedgies have evolved into a group of selfish and self fulfilling liars that they consider this behavior a normal MO and accepted and expected way of life. It will take years for that mind set to change unless they delve out real jail time and really enforce the laws like the sheriff Joe Aparillo does out west. Not a lot a repeat offenders in his area. Even Bubba doesn't come back to see sheriff Joe.
Re: Rico. Suave. Wheel of Justice Grinding Away... By Both oars in the water on 10/31/2007 11:05 PM
Phantom Shares by Bloomberg's Gary Matsumoto nominated for an EMMY!!!!

http://www.youtube.com/watch?v=Bfi3Hxasm2s
Re: Rico. Suave. Wheel of Justice Grinding Away... By ted on 11/1/2007 6:45 PM
Morgan Stanley has settled a class action suit for charging warehouse and insurance fees on silver that didn't exist (they naked shorted to their own customers, then used their money to get a return).

This guy's point is that real money is gold, silver, oil, real estate company shares, etc. and that if you control the asset, then you can make risk free fiat money off of it, by writing covered options.

http://www.marketoracle.co.uk/Article2625.html

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