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  Thursday, 16 Dec 2010 | 5:18 PM ET

Insider Trading—Today's Crime Wrap

Posted By: Ash Bennington

CNBC's John Carney on Today's Arrests(CNBC) "Federal authorities arrested four suspects on insider trading charges involving a wide range of technology companies, escalating the recent crackdown on Wall Street hedge funds and expert networks. The arrests occurred Thursday in Boston, Massachusetts, Round Rock, Texas, Santa Clara and San Diego, California. The charges include four different counts of wire fraud and securities fraud. More arrests are expected in January."

4 Arrested in Insider Trading Investigation \(NY Times DealBook\) The arrests advance the government’s focus on so-called expert-network firms, which have emerged over the past decade as the research departments of large investment banks have retrenched. Another reason for their growth is Regulation Fair Disclosure, a decade-old Securities and Exchange Commission rule that requires publicly traded companies to disclose material information to all investors at the same time. That rule, known as Reg FD on Wall Street, left information-hungry hedge funds looking for new ways to gain an investment edge.

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  Thursday, 16 Dec 2010 | 5:09 PM ET

AMD Says It Is the Victim of Insider Trading

Posted By: John Carney

No doubt more than a few eyebrows will be cocked when the eyes below them come across Advanced Micro Devices statement that it was the victim of insider trading.

“It appears that AMD is the victim of an insider trading scheme,” AMD said in statement.

AMD continues:

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  Thursday, 16 Dec 2010 | 4:29 PM ET

If The EU Debt Crisis Is so Important, Why Don't We Hear More About it?

Posted By: Ash Bennington

Why is it that we don't see more media coverage in the U.S. about the debt crisis in the Eurozone?

Getty Images

If the world is truly Flat and Wired and Globalized , how come we don't hear more about a crisis that threatens to tear asunder the fabric of European Union?

Such questions often have complex cultural, geopolitical explanations.

But maybe not this time. The answer may be as simple as this: Because it's not our money.

Let's begin with a specific example.

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  Thursday, 16 Dec 2010 | 2:58 PM ET

A Mystery From the Insider Trading Bust: Who Is Cooperating Witness Number 5?

Posted By: John Carney

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.

Erik Snyder | Getty Images

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.” \(“Hedge Fund -1” is most likely Spherix Capital, which was started by Richard C.B. Lee, a former SAC Capital employee who is identified as CW-1 in the complaint.\)

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  Thursday, 16 Dec 2010 | 2:55 PM ET

Insider Trading Ring Accused of Leaking Early iPad Information

Posted By: John Carney

One of the technology executives arrested Thursday in an insider trading sweep allegedly leaked advanced information about Apple’s iPad and revamped iPhone.

iPad
Getty Images
iPad

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.

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  Thursday, 16 Dec 2010 | 2:06 PM ET

Risk-On, Risk-Off 'Karate Kid' Trade Coming to End: Schwab's Sonders

Posted By: Jeff Cox

After dominating investing through 2010, the dreaded market correlation trade is starting to wear off, says Charles Schwab’s Liz Ann Sonders.

Source: aboutschwab.com

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.

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  Thursday, 16 Dec 2010 | 1:46 PM ET

Corker: The Budget Bill Is A Monstrosity

Posted By: Lori Ann LaRocco

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.

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  Thursday, 16 Dec 2010 | 1:10 PM ET

Insider Trading Charges Bring A Sigh of Relief Heard from Greenwich to Wall Street

Posted By: John Carney

A sigh of relief went out as authorities announced new insider trading charges against five people Thursday.

Digital Vision | Photodisc | Getty Images

“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.

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  Thursday, 16 Dec 2010 | 12:53 PM ET

Meet Walter Shimoon

Posted By: Ash Bennington

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.

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  Thursday, 16 Dec 2010 | 10:53 AM ET

The Financial Crisis Commission Should WikiLeak Itself

Posted By: John Carney

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.

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About NetNet

  • NetNet is where you'll find the low-down and the high jinks of Wall Street. It's the place for insider stories, trader gossip, and tales of the foibles of the moneyed crowd and the culture of finance.Wall Street news and commentary served fresh all day long.

 

  • Jeff Cox is finance editor for CNBC.com.

  • Lawrence Develingne

    Lawrence Delevingne is the ‘Big Money’ enterprise reporter for CNBC.com and NetNet.

  • Stephanie Landsman is one of the producers of "Fast Money."

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