Well, not really. But you’d think, based on the SEC’s virulent reaction to the decline in banking stocks, they or the Treasury or DOJ or somebody would act to protect oil investors, as well. These poor souls lost another $4 per barrel on Tuesday. But maybe not all investors are created equal after all. If you invest in oil and get caught in the market whipsaw, you deserve to lose money. Or maybe if you short-sell oil futures, you deserve to make it. Either way, the government’s response to the crisis in mortgage banking seems dysfunctionally two-faced.
From the monthly archives:
July 2008
Atul Malhotra, former VP of imaging and printing services at Hewlett Packard (HP) pleaded guilty today to stealing trade secrets in a joint prosecution by federal and California authorities. Federal trade secrets prosecutions are relatively rare but — like most federal white collar crimes — they bring a super-sized penalty. [click to continue...]
Société Générale has been treated to all kinds of abuse for recognizing in 2007 Jerome Kerviel losses incurred just over year-end cutoff, in 2008. Floyd Norris has been especially critical of the French bank’s use of the “true and fair view” exception which he calls an IFRS “loophole.”
Well, as they say, what goes around comes around. In the Alice-in-Wonderland world of financial reporting standards setting, the current U.S. financial accounting standards-setter (the FASB) is on the verge of effectively ratifying SocGen’s 2007 treatment of those Kerviel losses. This ratification comes in the form of an Exposure Draft — for lay readers, an “ED” is a draft of a new accounting standard — on the Disclosure of Certain Losses and Contingencies. More on that below. [click to continue...]
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Before he died, in 1960, Earl Long managed to serve three times as Governor of Louisiana and — despite widely acknowledged corruption — not a day in prison. In the context of today’s plague of litigation and over-zealous white collar prosecution, some might find helpful this advice of Governor Long:
Don’t write anything you can phone. Don’t phone anything you can talk. Don’t talk anything you can whisper. Don’t whisper anything you can smile. Don’t smile anything you can nod. Don’t nod anything you can wink.
A June 26 NPR report confirms suspicions I first expressed on June 20 that the Bear Stearns indictments distort facts, casting them in the most unfavorable light possible. I’ve reached the point in reading indictments that I disbelieve 90 percent of what they contain. A disturbing percentage of prosecutors are either blantant liars (maybe trained by Worldcom accountants?) or they go off half-cocked, substantially lacking essential context.
Who to blame? Mothers, professors, law schools? Hard to say, but one thing’s sure: they have a huge credibility problem. [click to continue...]
