What Will Be Preet Bharara’s Legacy?

A court has upheld one of the former U.S. Attorney Preet Bharara’s signature convictions, but his anti-corruption record is under threat in the age of Trump.

hen the United States Court of Appeals for the Second Circuit upheld the conviction of Mathew Martoma yesterday, Preet Bharara might have breathed a sigh of relief. As the U.S. Attorney for the Southern District of New York from 2009 until this past March, when President Trump fired him, Bharara led a crackdown on insider trading. Martoma, a former S.A.C. Capital portfolio manager, represents one of Bharara’s standout successes: one of the largest insider-trading cases the government has ever brought, involving an alleged two hundred and seventy-five million dollars in illegal profit. Bharara’s anti-corruption campaign resulted in dozens of guilty pleas and convictions of hedge-fund traders, analysts, and corporate executives at publicly traded companies, as well as the indictment of S.A.C. Capital, Steven A. Cohen’s former hedge fund. (Cohen himself was never charged.) In February, 2012, Bharara landed on the cover of Time magazine, with the headline “This Man Is Busting Wall Street.” He seemed poised to follow the path laid by another U.S. Attorney, Rudy Giuliani, who rode a sort of Wall Street-sheriff reputation to national prominence and a political career. In recent months and years, though, incursions on Bharara’s record have piled up, casting his legacy into doubt, or at least undermining some of his signature accomplishments. Seeing Martoma’s conviction from 2014 upheld may go a long way toward preserving his legacy. read more »

On Insider Trading, There Ought to Be a Law

Nobody can be sure of what's legal or illegal. Judges keep changing the rules because there's no U.S. statute to guide them.

The biggest problem with U.S. insider trading laws is that the U.S. has no insider trading law.

It’s true. The nation’s seminal securities statute, the Securities Exchange Act of 1934, while broadly outlawing securities fraud, never even employs the phrase “insider trading.” And over the subsequent 83 years, while Congress has occasionally increased the penalty for insider trading, it has never gotten around to defining what it is.

As a result, federal prosecutors, the Securities and Exchange Commission and the federal courts have engaged for decades in an ongoing tussle over what constitutes illegal insider trading, with the boundaries constantly shifting, to the detriment of, well, justice. Wednesday’s decision by the U.S. Court of Appeals for the Second District to uphold the insider trading conviction of Mathew Martoma, the former portfolio manager for Steven A. Cohen, is just the latest proof that we would all be better off if there were, you know, a law. read more »

Goldman's Hunger Bonds Dodge U.S. Sanctions That Bypass Traders

The U.S. levied additional sanctions on Venezuela on Friday, but one of the nation’s largest bondholders may be breathing a sigh of relief.

Goldman Sachs Asset Management, which bought $2.8 billion of notes issued by the state oil company in May, has faced sharp criticism for a deal that appeared to supply fresh funds to President Nicolas Maduro. While observers thought the securities would be a prime target for new penalties, they were exempt from the order. In fact, the only bonds covered by the trading ban are notes due in 2036 that appear to never have been sold outside Caracas. read more »

The Gold Market Just Got Rocked by a Mysterious and Massive Trade

So much for a quiet Friday in late August.

After weeks of relative slumber, gold traders were rudely awoken to a surge in volume and volatility. In a span of one minute, 21,256 gold futures contracts, equal to more than 2 million ounces, traded just before Federal Reserve Chair Janet Yellen addressed a gathering of policy makers in Jackson Hole, Wyoming.

The episode jolted the market after a measure of 60-day volatility on the metal touched the lowest since 2005. Gold had been in quiet mode even amid political discord in Washington, concerns about rising U.S. interest rates and tensions between the U.S. and North Korea. Yellen’s speech, which lacked clear rate cues, did little to calm the price swings and damped expectations of a rate hike this year. read more »

VW engineer jailed for emissions scandal

A former Volkswagen engineer who helped develop a device that enabled cars to evade US pollution rules has been sentenced to more than three years in prison and ordered to pay $200,000.

James Liang, 63, was the first person prosecuted in the emissions scandal.

The US investigation has led to charges against seven others in the US and sparked probes in other countries. Volkswagen has admitted guilt, agreeing to spend as much as $25bn to address US claims.

Liang co-operated with prosecutors, who argued that his help with the investigation warranted a reduction in the possible punishment to three years in prison and a $20,000 fine. But US District Court Judge Sean Cox opted for a harsher penalty of 40 months and a $200,000 penalty, saying he wanted to send a message to others in the car industry.

"This is a very serious and troubling crime against our economic system," he said. read more »