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While hedge fund employees breathed a sign of relief today when they learned that none of their numbers had gone down in the big insider trading sweep today, a close read of one of the criminal complaints filed in federal court today reveals that New York hedge funds have a mole in their midst.
The mole is referred to as CW-5 in the criminal complaint filed in a federal court in New York City today. According to the complaint, CW-5 is an employee of a New York based “hedge fund” referred to as “Hedge Fund -2.” \(“Hedge Fund -1” is most likely Spherix Capital, which was started by Richard C.B. Lee, a former SAC Capital employee who is identified as CW-1 in the complaint.\)
One of the technology executives arrested Thursday in an insider trading sweep allegedly leaked advanced information about Apple’s iPad and revamped iPhone.
Walter Shimoon, an employee of contract electronics manufacturer Flextronics International —a key Apple supplier—is accused of supplying confidential information about Apple’s new products to a tech sector analyst identified only as “CW-2.”
The criminal complaint in the case reveals that Apple and Flextronics referred to the iPad by the code-name “K48” in 2009. In October of 2009, Shimoon and CW-2 held a phone conversation that was recorded in which Shimoon allegedly revealed, among other things, that Apple was working on a new project under the code name K48.
After dominating investing through 2010, the dreaded market correlation trade is starting to wear off, says Charles Schwab’s Liz Ann Sonders.
Trading the market this year has been a little like Wall Street’s version of “The Karate Kid.” Instead of Daniel-san being tutored in the ways of “wax-on, wax-off,” traders have been following the “risk-on, risk-off” practice in their own version of money martial arts.
When it’s risk on, that means all asset classes—stocks, commodities, Treasury prices—are all moving higher \(except for the US dollar\). Risk off means the stock market’s dropping, commodities are falling and Treasurys are losing ground.
Congress may have amnesia. Little more than five weeks have passed since the election, and the Senate is preparing the biggest pork feast this side of the Mississippi.
We're talking some serious BBQ folks: the 1,924 page omnibus bill has 6,000 earmarks in it. I've been told by sources that "Uncle Harry" is pushing them to pass this pig-packed bill before the end of the year, some anticipating to stay this weekend in order to do it. Interesting how some members who fought tooth and nail for their jobs in November are about to spit in the face of their constituents who voted for a more fiscally responsible Congress. I wonder if any of the newly anointed "fiscal conservatives" will vote yes on this bill.
One of the Senators leading the charge to change Uncle Sam's free spending ways is Senator Bob Corker \(R-TN\), a member of the Banking Committee. On Wednesday, the Senator along with Senator Claire McCaskill \(D-MO\) introduced an Amendment to cap federal spending as a percentage of GDP. I decided to talk to Corker about the budget appropriation bill.
A sigh of relief went out as authorities announced new insider trading charges against five people Thursday.
“I’m just glad it’s not anyone who is anyone,” a hedge fund manager explained.
Those charged—four consultants and an employee of Primary Global Research—are not closely connected with either the hedge fund world or Wall Street’s investment banks.
“It’s good news every time they arrest someone who isn’t running money, someone who isn’t primarily engaged in trading securities,” another manager explained.
Because of the ongoing probe, however, most of the fund managers or employees we contacted didn't want to be quoted on the record. They may be relieved that today’s bust didn’t involve them or their friends—but they didn't want to attract the attention of the authorities either.
Walter Shimoon is one of the suspectsarrested on Thursdayin connection with the government's latest insider trading crackdown.
According to Shimoon's profile on an online networking website, he is employed by a tech company called Vista Point Technologies, located in the San Francisco suburb of Milpitas, CA
Shimoon lists his current position as "VP Business Development for Asia & Americas".
Much of this information—job title, sector, and location—may be relevant to the complaint.
Keith Hennessey has posted on his website a copy of the 9-page Financial Crisis Primer that the Financial Crisis Inquiry Commission sent to the president and congress, to meet the statutorily mandated December 15 deadline.
Hennessey, one of the four Republicans on the commission, voted against the commission’s decision to extend the deadline from December 15 to January of 2011. His grounds for doing so were valid and important: the law requires the report to be submitted on December 15 and it doesn’t authorize the commission to extend its own deadline. By voting to extend, the commission was deciding to willfully violate the law.
The SEC has just charged Jonathan Star Bristol, an attorney for the former financial advisor Kenneth Ira Starr, with aiding and abetting Bristol's multi-million dollar fraud. The SEC alleges that Starr's crimes involved more than $25 million in stolen funds.
The charges stem from Bristol allowing his clients to use trust accounts as "conduits" for stolen money.
According to an official SEC communication : "The SEC alleges that Starr and two entities he controls — Starr Investment Advisors LLC and Starr & Company LLC — have made unauthorized transfers of money in client accounts that ultimately wound up in Starr’s personal accounts.
Morgan Sze—reportedly the highest paid trader at Goldman Sachs—is said to be leaving.
Think about this:
1) Goldman Sachs is the most profitable firm on Wall Street.
2) Most of Goldman's profits come from trading .
3) Morgan Sze is reported to earn more than all other players in the most profitable area of the most profitable shop on The Street.
This is a big story about a big guy.
So where is Morgan Sze going—and why?
Spanish Borrowing Costs Rise (Bloomberg) "Spanish 10-year bonds declined, pushing yields close to their highest in two weeks, after Spain’s borrowing costs rose at its last debt sale for this year amid mounting concern over the country’s credit quality. German 10-year yields were within three basis points of the highest since May 3 even after a report showed the euro-region’s manufacturing and services industries slowed more than economists forecast in December. Moody’s Investors Service said yesterday it may downgrade Spain’s credit rating, citing the cost of rescuing its banks. European Union leaders begin a two- day meeting in Brussels today to discuss the creation of a permanent crisis-fighting mechanism."
As EU Summit Begins, Divisions Remain (Reuters) European leaders sought to paper over deep divisions on how best to resolve the debt crisis ahead of a summit on Thursday, and Spain and Portugal came under renewed pressure to get their finances in order. German Chancellor Angela Merkel said she had settled a dispute with Jean-Claude Juncker, the chairman of the Eurogroup of countries, over the idea of issuing euro area bonds, but differences still looked likely to arise at the summit. 'Jean-Claude Juncker and I had a long telephone conversation and cleared up the issue a while ago,' Merkel said in an interview with Germany's Bild newspaper published on Thursday. 'With so much at stake, the emotions sometimes get involved.
'Juncker, who is a strong advocate of issuing so-called E-bonds, which Merkel says are unnecessary and would dent Germany's credit standing, also said the disagreement was resolved, but has hinted he could raise the proposal anyway.
John Carney is a senior editor for CNBC.com, covering Wall Street and finance and running the NetNet blog.
Jeff Cox is finance editor for CNBC.com.
Lawrence Delevingne is the ‘Big Money’ enterprise reporter for CNBC.com and NetNet.
Stephanie Landsman is one of the producers of CNBC's 5pm ET show "Fast Money."