Wall Street VP, Evangelical Baptist minister – just the thief you can trust, eh?


Korchevsky’s Sunday gig, Wall Street during the week, full-time crook

A federal judge in Brooklyn, N.Y., has ordered that Vitaly Korchevsky, a former Morgan Stanley vice president arrested for allegedly trading on confidential corporate information stolen by hackers in Ukraine, be released on $2 million bond.

Mr. Korchevsky, 50 years old, also will be required to pay a $200,000 cash deposit, surrender his and his family’s passports, wear an ankle bracelet for location monitoring and restrict his movements to certain parts of Pennsylvania and New York.

Prosecutors had pressed for the judge to keep Mr. Korchevsky detained in federal custody. They alleged that Mr. Korchevsky was one of the biggest beneficiaries of an elaborate scheme in which overseas hackers stole nonpublic corporate information stored in newswires’ systems and gave it to financial traders, who used the press releases to make lucrative bets.

Mr. Korchevsky alone made more than $17 million in profits from the insider-trading scheme, prosecutors allege, and $10 million of that already has been frozen by the government…Charges…include securities fraud and money-laundering conspiracy…

Mr. Korchevsky has been a Baptist pastor for decades, and dozens of his friends, family and congregants came to support him at Wednesday’s hearing—an estimated 80 to 90 people, according to Mr. Korchevsky’s lawyer Steven Brill. So many people packed into the Brooklyn federal courthouse that an overflow room had to be set up, which is unusual for a routine bail hearing. Some showed up from as far away as Spokane, Wash…

“If you don’t play ball, you’re going to disappoint a lot of people,” Judge Dearie said to Mr. Korchevsky, citing “the faith that hundreds of people have placed in him.”

Mr. Korchevsky is one of five defendants arrested in the U.S. for the alleged scheme. Criminal charges also have been filed against four others who are still at large in Ukraine. International warrants have been issued for their arrest.

Gotta love Korchevsky’s lawyer who claimed he was no flight risk because if he fled back to Ukraine he’d be leaving his wife and children behind in the US. Given the list of crimes he’s charged with, the “ethics” he ignored both on Wall Street and as a pastor, why presume he’s not above walking out on his family?

He’s handing over $200K to guarantee his presence at trial. Gee, that only leaves him with $7 million or so to take with him if he skips out on his family.

Harvard Doctor turns hedge fund profiteer, then, convict – after sentence for insider trading

From the age of six, Joseph F. “Chip” Skowron III aspired to be a doctor. At Yale, he earned both a medical degree and a doctorate in molecular and cellular biology, then qualified for Harvard’s elite, five-year residency program. Three years in, Skowron quit medicine for Wall Street. He and two partners started a group of health-care investment funds under the auspices of FrontPoint Partners LLC, a hot new property in the exploding world of hedge funds.

Skowron was soon making millions of dollars a year. He built a gabled, 10,000-square-foot home on three acres in the nation’s hedge-fund capital, Greenwich, Connecticut. He assembled a small fleet of pricey cars, including a 2006 Aston Martin Vanquish and a 2009 Alfa Romeo Spider 8C. He also spent vacation time engaged in Third World humanitarian causes…

Today, Skowron…is serving a five-year term for insider trading at the federal prison at Minersville, Pennsylvania. At FrontPoint, Skowron lied to his bosses and law enforcement authorities, cost more than 35 people their jobs and stooped to slipping envelopes of cash to an accomplice. FrontPoint is gone. Morgan Stanley, which once owned FrontPoint, is seeking more than $65 million from Skowron, whose net worth a year ago was $22 million. Until he’s a free man, his wife of 16 years will have to care for their four children and Rocky, their golden retriever, on her own…

Health care has become America’s sweet spot for insider traders like Skowron. Among researchers, physicians, government officials and corporate executives, the lure of easy money in health-care insider trading has become epidemic. Since 2008, about 400 people were sued by regulators or charged with insider trading; of those, at least 94 passed or received tips involving pharmaceutical, biotechnology or other health-care stocks.

RTFA for the cautionary tale of humanitarian physician – turned scumbag profiteer, insider trader on Wall Street.

Goldman-Sachs pimp exec bragged about his untouchable power!


Daylife/Reuters Pictures used by permission

Fabrice Tourre, the Goldman Sachs executive accused by the Securities and Exchange Commission of making misleading statements about toxic investments, had a grandiose view of his own position in the financial system, according to emails the SEC said he wrote.

An email by Tourre, according to the SEC’s complaint against him and Goldman Sachs, proclaimed, “More and more leverage in the system. The whole building is about to collapse anytime now…Only potential survivor, the fabulous Fab(rice Tourre)…standing in the middle of all these complex, highly leveraged, exotic trades he created without necessarily understanding all of the implications of those monstruosities!!!!” (Sic)

That email was sent to a friend of Tourre’s, according to the SEC complaint.

His department was also of the view that CDOs were in terrible shape, according to the SEC. A Feb. 11, 2007 email that the complaint says was sent to Tourre by the head of Goldman Sachs’ structured production correlation trading desk allegedly said, “the cdo biz is dead we don’t have a lot of time left.”

The SEC said Goldman Sachs and Tourre misled investors about a synthetic collateralized debt obligation, or CDO, that hinged on the performance of subprime residential mortgage-backed securities…

The CDO, called ABACUS 2007-AC1, was structured and marketed by Goldman in early 2007 when the U.S. housing market and related securities were beginning to show signs of distress, the SEC complaint said.

According to the SEC, Goldman Sachs failed to disclose to investors vital information about the CDO, in particular the role that John Paulson, a major hedge fund manager, played in the portfolio selection process, and the fact that the hedge fund had taken a short position against the CDO. Neither Paulson nor his hedge fund company were named as defendants in the SEC complaint.

These crooks all play by the same rules – or in the case of this recession – play by the absence of rules and oversight. Something the Republican Party is about to say NO to, once again. The last thing they want is for the real money in this land to be hampered by living up to the law.

It was the same at all levels. The first example I personally witnessed of how the system had been corrupted – I watched a young married couple, both undocumentados, buying a single-wide with no credit history and 10% down. The trailer farm salesman promised them “no problem” and as he explained to me – a group of trailer dealers owned the storefront mortgage company which would make the mortgage and sell the paper to someone like Countrywide.

No state rules or oversight required for the storefront mortgage company. Still isn’t any, btw.

These cruds at Goldman-Sachs did the same thing on a global scale. Only they had their Republican buddies from the Contract on America handling things for them in the federal government. Deals that weren’t worth the paper they were written on – floated merrily downstream – no oversight, no regulators worth their salt would actually look at their dealings.

Supreme Court case illustrates absurdity of US patent law

It took less than two minutes Monday for the high-stakes patent case in the Supreme Court to descend to the level of questioning whether “Lorenzo Jones” could get a patent on one of his hare-brained inventions, if Bernard Bilski and Rand Warsaw could get one on their theory about managing business risk. “Jones,” an old-time radio figure who thought his creations in a garage would bring him fame and fortune, made an appearance in the first question, by Justice Antonin Scalia.

Scalia also suggested the seeming absurdity of a patent for Dale Carnegie’s influential 1936 book, How to Win Friends and Influence People. But it was the “Lorenzo Jones” comment that set the tone for the entire argument in Bilski, et al., v. Kappos (08-964). It would take a most inventive analyst to find a way in the argument for the risk-management idea under review to fit into the Patent Act’s coverage. The idea had no defenders whatsoever on the bench

The largest question left unanswered when the one-hour argument was over was whether the Court would go forward and issue a major new ruling interpreting patent law, when the practical result here seemed so evident. Lawyers and judges have invested heavy resources in the Bilski case, and it does raise a fundamental question that may well need answering. But, when there may well be no formulation of patent law that would salvage the Bilski-Warsaw creation, why bother?

J. Michael Jakes, a Washington lawyer arguing for a patent on that invention, faced a seemingly unending litany of hypotheticals to test how far he would take his plea for wide access to a patent monopoly. Justice Sonia Sotomayor wondered if a patent would be available on “a method of speed-dating,” Justice Ruth Bader Ginsburg asked about methods for avoiding corporate takeovers or picking a jury, Justice Stephen G. Breyer brought up a successful businessman’s right to protection for “how he made his money” and a method for teaching antitrust law that “would keep 80 percent of the students awake,” Chief Justice John G. Roberts, Jr., wondered about a business model counseling “buy low and sell high,” and Justice Anthony M. Kennedy questioned patent rights for someone who went to the Bureau of Statistics and worked out a table of life expetancy. On and on the hypotheticals went.

These schmucks actually want a software patent on managing hedge funds according to the weather.

Billionaire head of hedge fund arrested for fraud, insider trading


Daylife/Reuters Pictures used by permission

By all appearances, Raj Rajaratnam was a self-made billionaire, having built Galleon Group into a giant hedge fund with a specialty in technology companies.

But prosecutors said on Friday that he had profited not from his trading genius but from his Rolodex, and they arrested him on charges of conspiracy and securities fraud in what they called the biggest insider trading scheme ever involving a hedge fund.

In all, six people were arrested, accused by prosecutors and the Securities and Exchange Commission of earning more than $20 million from illegal trading in companies like Google, Akamai and Hilton Hotels over nearly three years.

Mr. Rajaratnam is accused of tapping a vast network of informants across a swath of corporate America: a senior official at I.B.M. considered a contender for the top job at that firm; executives of Intel and the consulting firm McKinsey & Company; two former Bear Stearns employees who had moved to a hedge fund, New Castle Partners; and an analyst at Moody’s Investors Service.

While trading secrets, though, one crucial piece of information was not shared — several of the phones were tapped.

The wiretaps were made with the help of an unnamed cooperating witness, a former Galleon employee who was said to ply Mr. Rajaratnam with information originally to land a job. The witness, who began cooperating in November 2007, has agreed to plead guilty in the hopes of receiving a lesser sentence.

This case should serve as a wake-up call for Wall Street,” Preet Bharara, the United States attorney for the Southern District of New York, said at a news conference on Friday. He added that the investigation was continuing.

Wake-up call my Sweet Aunt Josephine’s rosy cheeks! RTFA. It’s like cleaning out the White House and leaving behind a thoroughly corrupt Congress.

The SEC was pressed into dumping a few bad apples like Madoff – and now Rajaratnam – who sit in the midst of a network of corruption and deceit that remains without thoroughgoing regulation or oversight.

Hedge fund was “feeder” for $7 billion to Madoff fraud

A US hedge fund, Fairfield Greenwich, has been charged with fraud for pumping nearly $7 billion of its clients’ money into Bernard Madoff’s corrupt investment empire with “total disregard” for any checks on the renegade financier’s activities.

The action, by Massachusetts’ securities regulator, is the first to be taken against any of the so-called “feeder funds” that channelled billions of dollars in the direction of Madoff, who was jailed last month…

The Fairfield Greenwich hedge fund caught up in the scandal is run by Walter Noel, a high-profile New York society figure whose glamorous family was once described by Vanity Fair magazine as “shoring up the virtues of a nearly extinct aristocracy”.

Charges filed by Massachusetts’ secretary of state, William Galvin, said 95% of the firm’s $7.2bn Sentry fund was invested with Madoff, who admitted in court last month that he had barely done any genuine trading for nearly two decades.

Through a 1% commission fee, Fairfield earned $100m a year from pushing money in Madoff’s direction.

Galvin’s charges said: “They were blinded by the fees they were earning, did not engage in meaningful due diligence and turned a blind eye to any fact that would have burst their lucrative bubble.”

Crooks paying commissions to crooks surely sounds like conspiracy.

Former Nasdaq head arrested for $50 billion hedge fund fraud


Madoff’s investors celebrate the holiday season – asking where their money went?
Daylife/AP Photo by Diane Bondareff

The former chairman of the Nasdaq stock market has been arrested and charged with securities fraud, in what may be one of the biggest fraud cases yet.

Bernard Madoff ran a hedge fund which ran up $50bn (£33.5bn) of fraudulent losses and which he called “one big lie”, prosecutors allege. Mr Madoff is alleged to have used money from new investors to pay off existing investors in the fund.

The collapse of Madoff is likely to accelerate the disappearance of hedge funds

According to the US Attorney’s criminal complaint filed in court, Mr Madoff told at least three employees on Wednesday that the hedge fund business – which served up to 25 clients and had $17.1bn of money under management – was a fraud and had been insolvent for years, losing at least $50bn.

He said he was “finished”, that he had “absolutely nothing” and that “it’s all just one big lie”, and that it was “basically, a giant Ponzi scheme”, the complaint said.

He told them that he planned to surrender to the authorities but not before he used his last $200m-$300m to pay “selected employees, family and friends“.

Dan Horwitz, Mr Madoff’s lawyer, said: “Bernard Madoff is a longstanding leader in the financial services industry. We will fight to get through this unfortunate set of events.”

“Unfortunate set of events?” You represent a fracking crook.

This schmuck defrauded investors of enough money to bail the automobile industry a couple of times over.