Morning Coffee: No Fish Too Small for Insider Trading Investigators

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Federal regulators have made huge strides in cracking down on insider trading on Wall Street, taking down big names like Rajat Gupta, Raj Rajaratnam and even Martha Stewart, while actively targeting powerful firms like SAC Capital Advisors and its top brass. While the reports may be less newsworthy, last week’s headlines are a good reminder that it’s not just the big fish they’re after; it’s the little guys too.

Two former brokers at Euro Pacific Capital – law school buddies in their early thirties – are facing insider trading charges after one of the accused men’s roommates caught wind of an impending IBM acquisition at a brunch in Manhattan, according to The Wall Street Journal. Thomas Conradt and David Weishaus capitalized on the information, and are now facing time behind bars.

The latest person embroiled in an insider trading scandal is no Wall Street tycoon himself. In fact, he’s a senior editor of TheStreet.com, a financial news website. Michael Baron heard a tip from buddies at a basketball game and passed the news on to his father, who made less than $10,000 profit from the protected information, according to the Journal.

Neither Baron nor his father has been charged for their actions, but the younger Baron has been identified as a co-conspirator who is assisting authorities with the investigation. His friends were among six middlemen traders who were arrested last week on insider trading charges.

Heed the warning: No name or company is too small to be targeted.

Back in the News (Bloomberg)

Former International Monetary Fund chief Dominique Strauss-Kahn appears to be inching closer to settling with the hotel maid who accused him of rape. A French paper reported that Strauss-Kahn may need to borrow money from his wife to put the case behind him.

Cashing In (Bloomberg)

Two Goldman Sachs execs – CEO Lloyd Blankfein and President Gary Cohn – cashed out more than $6 million in stock options last week, just days before the options were set to expire. That’s on top of the $5 million in total they took home after selling options in October.

It’s All Going to Be Okay (FIN Alternatives)

With investigators breathing down its neck, SAC Capital Advisors held a conference call last week with roughly 1,000 employees, assuring them that the firm’s top brass, including founder Steven Cohen, acted appropriately when taking advice from former portfolio manager Mathew Martoma, who is accused of insider trading.  The firm is likely facing civil charges.

Dead Weight (Business Insider)

The Eurozone unemployment rate hit 11.7 percent, a new euro-era high. Take out Spain (26%) and Greece (25%) and the numbers get less depressing.

Opening Up the Books (Financial News)

U.K. business secretary Vince Cable wants to promote more gender diversity in the boardroom. To accomplish this, he’s asking for transparency. Cable wants executive search firms to publish the percentages of men and women who are long listed, shortlisted and appointed to executive positions.

The Good and the Bad (AOL)

Extending long-term unemployment benefits beyond the end of the year could create 300,000 jobs, although it would cost the government in excess of $30 billion, according to a new report from the Congressional Budget Office.

Buzz Around the Office

Johnnie Walker Black-Out (MSN)

A 65-year-old New Zealand man went temporarily blind after mixing his diabetes medication with vodka. Doctors were able to restore his sight using a $55 bottle of scotch.

List of the Day: Self-Destructing

When your company is struggling, avoid these self-destructing acts that may bring your career to a personal low.

  1. Asking for a bigger share of a shrinking pie.
  2. Getting outwardly angry.
  3. Forgetting your core strengths while chasing greener grass.

(Source: Bloomberg)

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