Savings Experiment: Snow Removal
The Money Man Behind Rick Santorum: Who Is Foster S. Friess?Today's Wall Street Journal has reports of two possible cases of serious ethical lapses [subscription required] at some of Wall Street's most revered institutions.
First, a study has shown an interesting pattern: the investment arms of investment banking institutions buying large stakes in companies shortly before a deal is announced involving the same company -- with the investment banking arm of the institution having worked on the deal.
There's nothing inherently illegal or unethical about that, as long as it's a coincidence. But if money managers at the institution were tipped off about the deal, it's a serious crime. The Journal on one study that examined deals and 13-Fs filed by institutions, and found that 19.5% of the time, large investment banks serving as lead advisers accumulated large stakes before a deal was announced. That's about twice as often as banks not involved with the deal accumulated shares.
Some question the study's methodology, but it's been enough to pique the interest of FINRA.
Meanwhile, the SEC is investigating (subscription required) whether several current and former employees at Merrill Lynch (NYSE: MER) engaged in the front-running of client trades: receiving an order and then buying shares for a house account before filling the order, profiting from the run-up caused by a buy from a larger institutional client.
It's more bad news for Merrill Lynch, which has been rocked by subprime write-downs and regulatory inquiries into its accounting. It could also be indicative of internal controls problems at the company.
Goldman Earnings Sink After Buffett Dividend
Johnson & Johnson's Income Falls 23%
Burberry Shares Leap on Sales Update
Reader Comments (Page 1 of 1)
1-18-2008 @ 5:54PM
Veracity Jones said...
BasherBusters.com: Keeping “them” honest
An online, user-driven financial utility
January 11, 2008
BasherBusters.com -- an online, user-driven financial utility -- officially launches today. Setting BasherBusters.com apart from the myriad of web-based financial utilities already in existence is their singular commitment to monitoring and exposing stock manipulations. Phantom shares, naked short sales, and other illegal or dishonest Wall Street activities known to affect the market are uncovered and reported by the BasherBusters team. Taking on some of the biggest firms and best-known names on Wall Street, BasherBusters.com hopes to change the way Wall Street does business.
An unnamed official of BasherBusters.com told us, “We have a mandate to inform the public of the surreal world of shadow markets and the unchecked illegal pillaging of the public savings.” The official added, “Access to all of our services is completely free. We are privately funded, so we are able to speak earnestly and honestly about the nefarious Wall Street dealings we uncover. We are not for sale and never will be”
In addition to using the site’s utility to track their stocks, registered users of BasherBusters.com will be able to report Wall Street schemes and suspicious activities they discover. The “Insider Info” page provides an up-to-date listing of stocks known to have been subjected to manipulative practices. The site also features a state-of-the-art utility to track threshold stocks listed on Regulation SHO. These are stocks that fail to deliver in the time mandated by the SEC. On Wall Street, more than 6 billion dollars in stocks fail to deliver every day.
The “About Us” page declares, “We’re here to give individual traders a free, accurate, instantaneous forum that can make a big impact on putting an end to market greed and on leveling the playing field for investors of all sizes.”