Enforcer Tuesday

tuesday

From black Friday to cyber Monday to enforcer Tuesday, today’s news moves from the shopping mall to the regulatory milieu.

First, SAC Capital Advisors LP fund manager Mathew Martoma was released on $5 million bail on Monday after making his first appearance in a New York court on charges of making illegal trades that hedge fund titan Steven A. Cohen personally signed off on. Martoma was charged last week in what U.S. prosecutors called "the most lucrative" insider-trading scheme ever.

He was accused of helping Cohen's firm avoid losses and reap profits totaling $276 million in the summer of 2008 by using insider tips he obtained from a doctor about Elan Corp and Wyeth LLC. Martoma worked for CR Intrinsic, a unit of Cohen's SAC Capital.

Let’s see if Martoma actually does time. It certainly hasn’t been the case, but there may be an improvement in that arena as we also learned that Mary Schapiro will step down as chairman of the Securities and Exchange Commission next month after her tumultuous tenure. Schapiro’s critics, and yes I fall into that camp, claim that she failed to act aggressively to charge the fraud Street banksters for their role in the financial crisis of 2008.

For example, in 2010, Goldman agreed to pay $550 million to settle civil fraud charges that it misled investors about mortgage securities before the housing market collapsed in 2007. That is all of about two weeks of earnings at Goldman and no senior executives were singled out. Plus, Goldman was allowed to settle the charges without admitting or denying any wrongdoing, as were other large banks that faced similar charges.

President Obama named Elisse Walter as her replacement. We will see if she is anything more than a wrist slapper, but let’s not hold our breath.

Trade well and follow the trend, not the so-called “experts.”

Behold the age of infinite moral hazard! On April 2nd, 2009 CONgress forced FASB to suspend rule 157 in favor of deceitful accounting for the TBTF banking mafia.

Value Areas:

ES 1402.00 / 1397.50

POC… 1400.25

YM 12923 / 12881

NQ 2646.25 / 2629.75

Best Trades to you,
Larry Levin
Founder & President- Trading Advantage
TradingAdvantageCom