Street Sweep
Feds nab insider trader at Nasdaq
May 26, 2011: 4:19 PM ETApparently Bernie Madoff wasn't the only bad apple at Nasdaq.
In the latest shining moment for the U.S. stock exchanges, the Securities and Exchange Commission on Thursday charged Donald Johnson, a former Nasdaq managing director, with ripping off investors to the tune of $755,000 by insider trading ahead of the release of corporate press releases.
Johnson, you will be impressed to learn, was in charge through October 2009 of the Nasdaq's "market intelligence" desk, which is surely a misnomer but seems in any case to have afforded him with a lot of info he used to trade profitably on outfits like United Therapeutics (UTHR).
Fearless leader
The SEC has come under heavy fire in recent years for its failure to nab Madoff, a three-term Nasdaq chairman in the 1990s, before he frittered away $20 billion in the biggest-ever Ponzi scheme. But the agency is doggedly trying to restore its good name by putting really catchy quotes in its press releases, an effort that was much in evidence Thursday.
"This case is the insider trading version of the fox guarding the henhouse," said Robert Khuzami, director of the SEC's Division of Enforcement. "Instead of protecting NASDAQ client confidences, Johnson secretly traded on client information for personal gain, even using his NASDAQ office computer to make the trades."
If you can imagine! As it happens, Johnson also pleaded guilty Thursday in a rather more serious criminal insider trading case, the U.S. attorney for the Eastern District of Virginia said. That one could get him 20 years in jail, regardless of whether the fox admits or denies his responsibility in this particular henhouse.
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The problem with nomadic megabanks
Behold an exciting new feature of the post-bailout era: the megabank that wanders the globe with the weapons of financial mass destruction strapped to its chest.
UBS (UBS), the giant Swiss bank that took $59 billion in bailout funds three years ago in addition to billions of dollars in conveniently cheap Fed loans, is chafing at the restrictions that terrified regulators there are imposing.
The government wants to avoid having its Godzilla-scale financial firms – MORE
Colin Barr - May 26, 2011 11:19 AM ET -
Is the AIG selloff overdone?
Could it be time to start kicking the tires on AIG?
It hardly seems like an auspicious moment. Shares have lost half their value this year, including a 3% walloping Wednesday, making the New York-based insurer the worst-performing big stock in the market. The supposedly smart money is having second thoughts, and AIG's (AIG) accounting, never exactly a strong suit, is being questioned again in an unwelcome blast from the past.
Even MORE
Colin Barr - May 25, 2011 11:55 AM ET -
The world's most reckless central bankers
Should the guys at the European Central Bank have to sit through a screening of "Too Big to Fail"?
It might remind them that a lesson of 2008 meltdown is that you can't extend and pretend your way out of the abyss, even if you're brandishing a bazooka. If Europe's central bankers accept this fact, they aren't showing it.
Take the ECB's decision this month to oppose a restructuring of Greek debt. MORE
Colin Barr - May 25, 2011 6:32 AM ET -
Problem banks list hits 888
The zombie banking industry took another half step forward Tuesday.
The list of banks at risk of failing expanded at its slowest rate since before the credit crisis, the Federal Deposit Insurance Corp. said. The so-called problem bank list rose by just four institutions to 888, FDIC chief Sheila Bair said.
That's still the highest number in two decades and the highest ratio since 1987 as a share of existing banks. It's a fact that MORE
Colin Barr - May 24, 2011 10:39 AM ET -
Big-bank CEOs: the billion-dollar bust
Has any group ever been more richly rewarded for failure than the CEOs of the six biggest U.S. banks?
Over the past decade the too-big-to-fail banks have showered a staggering $1.15 billion in cash and stock on a changing cast of hard-charging if inept chief executives, according to regulatory filings. That works out to an average paycheck of $19 million a year – this in a decade in which the biggest banks ripped off everyone in sight on MORE
Colin Barr - May 24, 2011 6:40 AM ET -
The silver lining in falling bank stocks
Summer is a month away yet, but the financials are already wilting. If we're lucky, this trend is just getting started.
Bank stocks fell for the second straight day Monday, as Bank of America (BAC) and Morgan Stanley (MS) sank within 5% of their 52-week lows. Another big trading bank, Goldman Sachs (GS), rose modestly but remains just 6% above its low of the past year.
The selloff is the latest sign MORE
Colin Barr - May 23, 2011 11:41 AM ET -
Why oil prices will spike again soon
How long till the next oil shock?
Energy prices have been coming down this spring as fears of a Middle East blowup fade. But persistent global demand, tepid supply growth and easy money mean it may not be long till the next damaging spike, Goldman Sachs economists say.
Oil prices could surge again by the end of 2012, economists Jan Hatzius and Andrew Tilton wrote in a note to clients this past MORE
Colin Barr - May 23, 2011 6:37 AM ET -
Central bankers vs. Bill Gross
Do central bankers have it in for the world's most widely cited Treasury bond bear?
You might well ask after reading the latest report from the rates strategists at Bank of America Merrill Lynch. They contend that global central bankers are about to spring off the sidelines to buy Treasury debt, in what stands to be the latest setback for the Pimco bond fund manager's giant bet against U.S. government bonds.
Since MORE
Colin Barr - May 20, 2011 1:28 PM ET -
Do falling gas prices spell recession?
Sick of high energy prices? You may soon have more relief than you'd like.
After two commodity price spikes in four years, $100-a-barrel crude and $4-a-gallon gasoline are starting to seem like the new normal -- the price we pay, unhappily enough, for an expanding economy. Every twitch in the Middle East sounds the alarm for a new oil shock.
But those cursing the wallet-thinning impact of high energy prices should be careful what they MORE
Colin Barr - May 20, 2011 6:38 AM ET
