OMG the SEC is going crazy busting people

Discussion in 'Wall St. News' started by ChkitOut, Sep 21, 2011.

  1. This is NOT insider trading!!!!!!!!!!!!!!!!! (in my opinion :D)

    NEW YORK—The Securities and Exchange Commission accused a former employee of Goldman Sachs Group Inc. and his father with insider trading on confidential information about the bank's hedging strategies, gleaned while that employee was a junior member of Goldman's exchange traded funds desk.

    Spencer D. Mindlin, 33 years old, an associate who worked at Goldman from 2001 to 2009, allegedly used his position on Goldman's ETF trading desk to tip off his father Alfred, 68, a certified public accountant, about the firm's trading. The two allegedly made $57,000 from the trading.

    The charges come as exchange traded funds, which track a basket of stocks like an index fund but are traded like stocks, fall under increased scrutiny. The SEC said Wednesday the case, brought as an administrative proceeding, was the first insider-trading enforcement action involving ETFs.

    Late last week a UBS AG employee was accused in an unrelated case of losing more than $2 billion of the bank's own money while trading on the firm's Delta One desk.

    The agency accused the Mindlins of trading illegally in four different securities underlying the SPDR S&P Retail ETF, known as the XRT, between December 2007 and March 2008 "with knowledge of massive, market-moving trades in these securities that Goldman would later execute."

    The alleged trades, which began three months after Spencer Mindlin started working on Goldman's ETF desk, were in a combination of options and shares of Sport Supply Group Inc., PC Mall Inc., Stage Stores Inc. and ValueVision Media Inc.

    Goldman, the SEC said, was the largest institutional holder of the XRT at that time in order to allow customers to short it, which is to say bet against it. To hedge its own long position, the SEC said, Goldman shorted the individual securities underlying the XRT.

    Spencer Mindlin is accused in the administrative proceeding of passing along information about Goldman's nonpublic holdings in the XRT and its plans to trade large amounts of securities underlying the XRT to hedge its position.

    A lawyer for the Mindlins said his clients did nothing wrong and disputed the claims that the son provided nonpublic information to his father and that the father used nonpublic information to trade.

    "This is a situation where a son working in the securities industry suggested a trading strategy to his father and helped the father understand and execute the strategy," said the attorney, Robert Knuts of Park & Jensen LLP. "That strategy was not based on any confidential information obtained by the son."

    Mr. Knuts contends the information was based on the well-known re-balancing phenomenon within the ETF industry and publicly available information.

    The SEC says the trading was conducted in a TD Ameritrade account belonging to a family member. In at least one instance, TD Ameritrade recorded a conversation between father and son discussing a trade. The SEC says in the administrative proceeding Spencer Mindlin impersonated his father on at least four calls to TD Ameritrade.

    According to the SEC's administrative proceeding, Spencer Mindlin did not disclose the outside brokerage accounts to Goldman, even though the firm's policies required that disclosure.

    A spokeswoman for Goldman said Wednesday the firm fully cooperated with the SEC's investigation. "The allegations by the SEC against a former employee are related to trading activity that was not conducted at Goldman Sachs," the spokeswoman said in a statement. "All of the trading was conducted in private, undisclosed accounts held outside of Goldman Sachs and none of the trading involved client information."

    —Drew FitzGerald contributed to this article.
  2. $57k? lol

    There is no such thing as "insider trading". Brokerages ripping off their customers by recommending the opposite. EG. I heard Chase unloaded their municipal bonds onto the public recently. Took a big hit.
  3. Bob111


    i can repeat this one more time..this country is FBAR..where is obama,when we need him? Mr President! here is your tax dollars..the money that should support your economy via gains,spending etc...i guess it's not enough..gotta take them all from old grandpa! way to go!
    how SEC can possibly proof this shit anyway? i guess with my almost every day profits via daytrading i'm next in line for some sort of "insider trading" accusations? could be a random claim,but hey...just to save some jobs in judictical and prosecutions system, right? gotta have lawyer too? now i see how "save jobs" idea works!

    meanwhile my HFT "friends" on other side of the screen doing quite well, sitting on both sides and capable to cancel their own orders before mine can even reach the exchange....they are the ones, who should be accused in "insider" trading..cause they have all the info...along with those fucks,who can upgrade\downgrade stocks and send info about it before market open to their preferred customers..

  5. Bob111


    told ya,the1-you better keep ALL of your statements on paper. forever! cause in this country you never know,when and how long arm of us law will strike you. imagine that you don't have your trades for 2001 on paper..good luck recovering them from IB..and you know that lame excuse 'i was unable to" won't fly in the court..

    just curious once again-how much this "investigation" did cost to us tax payers.
  6. Lucrum


    I assume you mean FUBAR

    Sorry to keep mentioning the FAA but they're also going crazy violating pilots in the last few years.
  7. 56,000?! lol SEC's a joke
  8. kxvid


    I agree and think the SEC is overreaching. The SEC going after a very broad strategy of what constitutes insider trading with this one. The only legal action I see here is essentially a misappropriation of trade secrets / intellectual property. Goldman Sachs would have standing as the plaintiff seeking to disgorge the pair of their gains in a tort of misappropriation of trade secrets. & GS doesn't sue over 57k as we all know.
  9. I always suspect that the laws are applied in discretion, a tool to get rid of competition. It would be interesting to do a culture background profile on those who bear the force of law.
    In this case, it is a punishment for double-crossing goldman sachs by its employee.
  10. Bob111

    Bob111 are right..i misspell that one..with famous irs fbar form..or maybe not...fbar will work for this case just fine. Fucked Beyond Any Recognition..see? works very well :p
    #10     Sep 21, 2011