Jeff Skilling has requested that he be granted release on bail
while his case is being considerate by an appeals cout, just as Conrad Black was released on bail while his case is being considered by an appeals court. The Supreme Court ordered that the convictions of both executives be reconsidered in light of the same decision, namely, the high court’s decision that the doctrine of “honest services” fraud had been applied in an overbroad manner.
Discover a Fraud? Trade on the Information!
I have been writing (for example here
) about the unhappy consequences of the SEC’s FinReg-blessed power to award whistle-blowers multimillion-dollars bounties. The one and only Larry Ribstein has now shown us the alternative, market-based solution: “Let the Whistleblowers Trade.”
If an employee thinks that he has discovered fraud at his company, let him put his money where his mouth is—by engaging in insider trading. And, if he is right, let the SEC exempt his trading from the regulations against insider-trading. After all, what is the market (according to the interpretation of Friedrich von Hayek) but the capitalist method of making information public.
I understand that Robert Moffat violated his contractual obligations to IBM, when he revealed confidential corporate information to his lover. And I understand that IBM definitely has grounds for a suit against him. But I cannot see that Moffat’s revelations of corporate information to Danielle Chiese are any of the government business. And certainly Chiesi’s use of those revelations is none of the government’s business.
The sociological revolution that made Moffat and Chiesi colleagues is a topic for another blog.
Hedge fund manager Paul Greenwood has pleaded guilty
to misappropriating clients’ funds from his companies, WG Trading and WG Investors. What is the psychology of a businessman who can, with malice aforethought and for a long period of time, defraud his clients and customers? I do not believe that most businessmen pilloried as frauds by press and prosecutors are any such thing, and so when I run across the genuine article, I am puzzled. Here is a lengthy background piece on the man
, written by Matt Trezza and published in Westchester
magazine. After reading it, I am still puzzled.