Supreme Court Rejects SAC Trader’s Final Chance At Overturning Prison Time

The U.S. Supreme Court refused to overturn the insider trading conviction of Mathew Martoma, a former portfolio manager who was caught trading on inside information while employed by SAC Capital. Had the decision been overturned, it would have undermined efforts to “clean up Wall Street”, potentially legalizing insider trading.

According to Bloomberg , the justices let a federal appeals court decision to uphold Martoma’s 2014 conviction stand without comment on Monday. Martoma was previously found to have used illegal tips to make $275 million for SAC on trades in two pharma stocks. He is currently serving a 9 year sentence in a Miami prison following the largest case of insider trading ever to be brought against an individual.

As a result of the decision, those who can now be convicted for insider trading include “traders who get an inside tip as a gift from an acquaintance or business associate”, according to white collar crime experts who reviewed the ruling.

Martoma’s lawyers argued that the ruling did not comply with the requirement for proof that the person providing the tip must receive personal benefit in return. Martoma had previously spurned requests to cooperate with the government in its investigation of SAC. 

Martoma’s appeal stated: “It now suffices for the government to prove that the insider intended to benefit the tippee/outsider. That test focuses on the wrong question and radically dilutes the government’s burden.”

Martoma’s failed appeal aside, SAC clearly agreed there was insider trading going on when the fund plead guilty in 2013 and paid a $1.8 billion fine to the U.S. to resolve insider trading claims. As a result, it changed its name to Point72 and for five years only managed founder Steve Cohen’s money. 

The Supreme Court previously ruled in 2016 that people could still wind up in jail, despite the insider providing the tip not trying to make money. In Martoma’s case, the court ruled that since the tipper had an “intent to benefit” the recipient, his benefit was irrelevant. 

The Trump administration had urged the Supreme Court to reject the appeal without a hearing, citing the “intent to benefit” standard. The government said that Martoma received confidential information about a clinical trial from a doctor that the trader had previously paid $70,000 in consulting fees. 

Hopefully Steve Cohen’s alleged hush money which bought Martoma’s allegiance and silence will be worth it (and still there upon his release) to make Martoma’s stay in Federal pound me in the ass prison – worth it.

via ZeroHedge News http://bit.ly/2MD4uhs Tyler Durden

Peso Climbs As AMLO Caves To Trump, Says Mexico Will Crack Down On Immigration

A surfeit of promising trade headlines, combined with Jerome Powell’s suggestion that the central bank would step in to backstop the market by cutting rates if the trade war fallout should worsen, has provoked a parabolic move higher in stocks Tuesday, propelled in part by the biggest short squeeze since the first week of the year.

And although President Trump’s insistence that the first round of tariffs on Mexican imports would go into effect on June 10, made during a press conference with Theresa May, briefly weighed on stocks and the peso, Mexican President Andres Manuel Lopez Obrador has responded with some jawboning of his own.

The peso climbed Tuesday morning in New York after AMLO said during a news conference in the Gulf of Mexico port of Veracruz that Mexico could be ready to step up measures to contain migration in order to reach a deal with the White House, Reuters reports.

Peso

A Mexican delegation led by Foreign Minister Marcelo Ebrard will discuss the dispute with US officials in Washington on Wednesday, and Lopez Obrador said he expected “good results.”

“The main thing is to inform about what we’re already doing on the migration issue, and if it’s necessary to reinforce these measures without violating human rights, we could be prepared to reach that deal,” Lopez Obrador said.

In spite of Trump’s comments, Ebrard has said there’s an 80% chance that the country will be able to avoid tariffs. AMLO’s conciliatory comments contrast with reports from yesterday that Mexico might respond with retaliatory tariffs of its own.

Trump’s tariffs arrive at a particularly delicate time for the Mexican economy, which contracted during the first quarter. Mexico’s economy is heavily reliant on trade with the US, and with USMCA in limbo, AMLO has assured the public he has a “plan” to ensure that the tariffs – which could max out at 25% – don’t impoverish the country, though AMLO has said he won’t engage in any trade wars with the US.

via ZeroHedge News http://bit.ly/2WcQz1e Tyler Durden

Steele Cuts Deal; Will Discuss Trump Sex Dossier With DOJ Inspector General 

Former MI6 agent Christopher Steele has finally agreed to meet with US officials to discuss his relationship with the FBI, and the now-infamous dossier of unfounded claims against Donald Trump which he assembled on behalf of the Clinton campaign and the Democratic National Committee. 

The 54-year-old Steele has agreed to meet with investigators from the US Justice Department’s Office of the Inspector General (OIG), according to The Times of London, after a former US official told Politico that the OIG report would “try to deeply undermine” Steele. 

The news marks a 180-shift in Steele’s past refusals to engage with US authorities. In April, Politico reported that Steele would not meet with the OIG to assist them with their investigation, while just last week, Reuters reported that he wouldn’t meet with US attorney John Durham, who was handpicked by AG William Barr to review the origins of the Trump-Russia probe. 

Steele, a MI6 Russia specialist for more than two-decades, has worked with the FBI as a confidential source since 2010. According to the report, he will retain the services of a top American attorney if the interview goes ahead, and is only willing to discuss the narrow scope of his dealings with US intelligence. Steele also wanted US officials to seek the approval of the British government. 

Of note, the Steele dossier was referred to as “Crown material” in emails between US intelligence officials.  

That said, a senior source told The Times: “As far as we are aware, no request has been made to HMG [Her Majesty’s government] on this matter. Any decision to co-operate would be a matter for Mr Steele as this relates to issues arising many years after he left government employment.” 

Last year Mr Steele, who runs a corporate intelligence company, was named as the author of memos containing unsubstantiated allegations that the Kremlin held sexually lurid information about Mr Trump.

Mr Steele’s dossier led to an FBI inquiry, which became a two-year investigation presided over by the special counsel Robert Mueller. That found that figures in the Trump campaign team expected to benefit from Kremlin activities but cleared Mr Trump of liaising with Russia. –Times of London

In his dodgy dossier – a collection of 17 memos, some of which used Kremlin sources – Steele claimed that the Trump campaign was part of a “well-developed conspiracy of co-operation” with the Russian government in an attempt to influence the outcome of the 2016 US election. Steele claimed that the Kremlin was blackmailing Trump with a video of him encouraging prostitutes to urinate on a bed once used by former President Obama. 

Steele’s work was commissioned by opposition research firm Fusion GPS, which was in turn paid by lawyers for the Clinton campaign and the DNC. 

via ZeroHedge News http://bit.ly/2HUFMVt Tyler Durden

Paul Manafort Headed To Rikers Island, Where He Faces Solitary Confinement

Former Trump Campaign Manager Paul Manafort is about to be transferred from his comfortable low-security prison camp in Pennsylvania to what is widely regarded as one of the most hellish prisons in the country: The Rikers island jail complex in New York City.

Citing anonymous sources familiar with plans, the New York Times and Fox News reported that Manafort will soon be transferred after Manhattan prosecutors struck a deal with the Feds to hold him in New York while he faces state fraud charges.

Manafort

The transfer was reportedly requested by Manhattan District Attorney Cy Vance Jr.’s Office after a New York grand jury indicted Manafort on several fraud counts, including residential mortgage fraud and faking business records. A New York State judge reportedly ordered the transfer at Vance’s request.

Manafort was sentenced earlier this year to nearly seven years in federal prison on connection with two federal cases. To guard against the possibility that Trump – who has praised Manafort as “brave” (Manafort struck a plea deal last year, but it was later rescinded after prosecutors determined that he had violated the terms) – might pardon Manafort, prosecutors in New York State pursued charges of their own. Manafort, who is 70 years old, will likely be arraigned on the new charges in State Supreme Court in Manhattan later this month. It’s still possible that his lawyers might seek to have him held at a federal jail in New York.

Rikers is a network of nine jails with a total of 7,500 inmates. Typically, the jail hosts inmates in pretrial detention, or those serving a year of less.

Given the prison’s violent reputation, high profile inmates are often held in ‘protective custody’ – that is to say, solitary confinement. It’s expected that Manafort would warrant protective custody, and sources familiar with the innerworkings of the prison said he would likely be held in a former prison hospital.

Here’s more from the New York Times:

A law-enforcement official familiar with the correction department’s practices, speaking on the condition of anonymity to discuss security measures, said Mr. Manafort would most likely be housed in a former prison hospital on the island. That is where most high-profile detainees are held, including police officers, those accused of killing police officers, politicians and celebrities.

A lawyer for Mr. Manafort, Kevin Downing, did not immediately respond to a request for comment. Spokesmen for the Manhattan district attorney’s office and the city’s correction department, which runs the jails on Rikers Island, did not immediately comment.

Federal officials agreed to honor the writ for Manafort under something called the Interstate Agreement on Detainers Act, a federal law that governs transfers of prisoners between states when they are facing unrelated charges in different jurisdictions.

Remember, Manafort was confined to a wheelchair during part of his trial in Virginia, and his lawyers have claimed that he is in consistently poor health.

via ZeroHedge News http://bit.ly/2HUhWsW Tyler Durden

My bank in Denmark just offered me a NEGATIVE rate of interest to borrow money

[Editor’s Note: Today’s note was penned by one of our international contributing editors.]

Yesterday I called my bank in Denmark, Nordea, and couldn’t believe what they told me…

They offered to lend me money at MINUS 0.12% for a ten-year mortgage.

In other words, the bank would PAY ME to take out a loan.

Of course, as a Sovereign Man editor, I’ve written a lot about negative interest rates. But most of these cases were always reserved for big banks or institutions.

That no longer seems to be the case…

Now, negative interest rates ARE the norm. Thousands, if not tens of thousands of Danes will go out and take out mortgages that will pay them every month.

This is completely mind-boggling to me. But it just highlights how broken the financial system really is.

Everything about this is in complete violation of the law of prosperity Simon Black’s been writing about for years: produce more than you consume and invest the difference.

Now, institutions and governments are incentivizing people to consume, instead of save. In fact, they’re paying people to go into debt.

That is not how prosperity is created. Instead of encouraging people to invest their surplus capital in productive investments, people are penalized for saving in the first place.

It’s like everything has been turned upside down.

Some of the most popular investments on the planet are the ones that burn the most cash (Tesla, Netflix, Uber, etc.)

Insolvent governments in Europe are able to borrow at negative yields, with no afterthought whatsoever as to the consequences.

And bankrupt governments like Argentina are able to borrow for 100 YEARS and pay next to nothing for it (even though Argentina went bankrupt twice in the last thirty years alone).

None of this makes any sense.

Here in Europe, bank deposits yield close to 0%.

In 2016, the Swiss government even asked its citizens to delay their tax payments as long as possible, because the government didn’t want to pay negative interest rates on those balances.

And in the United States, banks rob their customers blind time and time again by lying, stealing and deceiving them.

It’s extraordinary to me that these are the options we have with our money today.

Luckily, it isn’t all doom and gloom.

As my friend Simon says it: the world is a big place… and sometimes, we can make this insanity play to our advantage.

Just in the same way that I can get paid to borrow money…

And that bankrupt governments can borrow at negative yields….

And that companies losing BILLIONS each year with no end in sight can be some of the most popular investments in the world…

It also works the other way around.

Occasionally, we can find extremely well-managed businesses that are profitable, have a pristine balance sheet and pay generous dividends to their shareholders, that are selling for rock-bottom prices.

Our in-house Chief Investment Officer, Tim Staermose, editor of the 4th Pillar, spends his time scouring the corners of global stock markets for these opportunities.

One example he found was a boring Japanese company called Kitagawa Industries.

It had $151 million of cash in its bank account… Yet the value of ALL its shares was just $114 million– 24% lower than its net cash balance.

In other words, you could have theoretically bought every single share of Kitagawa for $114 million, put the entire $151 million bank balance in your pocket, shut the company down, and walked away with a tidy $37 million profit.

Make no mistake, this wasn’t some hot cash-burning start-up. It was a mature, profitable business with a long and successful operating history.

There was absolutely no good reason for it to be selling at such a large discount and no rational shareholder would ever agree to a deal like that.

But markets aren’t rational… so Tim recommended members of our flagship investment service, the 4th Pillar,  buy the shares.

And sure enough, less than one-and-a-half years later, a competitor recognized the opportunity and took over the entire company– generating a 249% return for our members in just 17 months.

As you can see, there are always pockets of value where you can make the insanity of the financial system work for your benefit. It just takes patience and willingness to do the hard work to find them.

For over eight years, Tim has been putting in the hard work for our members.

In fact, he just published his 100th 4th Pillar issue where he shared his latest thoughts on ten more deeply undervalued opportunities – just like Kitagawa Industries – that are trading at BUY levels right now.

You can click here to download a redacted preview of one of these opportunities. Inside, Tim shares the details of a company so awash with cash that it’s paying an astronomical dividend.

And to celebrate our 100th issue we’re offering a rare 50% discount for the next few days. Click here to learn more about the 4th Pillar and Tim’s latest opportunities.

Source

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Today’s Buying-Panic Is Being Driven By The Biggest Short-Squeeze In 5 Months

While this is unlikely to come as much of a surprise to any trade who can fog a mirror, today’s panic-buying bounce in stocks is being driven by the biggest short-squeeze since the first week of 2019…

We wonder if this will stop once the Nasdaq makes it back to even?

If there is any fundamental/news catalyst for the squeeze today, it is this – CNBC reports that Mexico’s president on Saturday hinted his country could tighten migration controls to defuse U.S. President Donald Trump’s threat to impose tariffs on Mexican goods, and AMLO expressed optimism today on negotiations with the U.S., and Mexican Foreign Minister Marcelo Ebrard said there’s an 80% chance that the country will be able to avoid tariffs.   Which, of course, would be a huge victory for Trump.

via ZeroHedge News http://bit.ly/2JVyTFH Tyler Durden

Attkisson: 10 Questions I’d Ask Robert Mueller (If I Were Allowed)

Authored by Sharyl Attkisson, op-ed via The Hill,

Most of now-former special counsel Robert Mueller’s public statement to the press last week seemed to fall under the category of “Fair enough.” After all, the man did nearly two years of work, he kept largely silent throughout, and he alternately was called a hero or a dog.

So the day Mueller resigns, he chooses to make a fairly brief statementputting a button on all of it, and at the same time declining to take any questions, before gliding back into private life.

But there’s at least one comment Mueller made that nags at me. It’s when he said, “If we had had confidence that the president clearly did not commit a crime, we would have said so.”

Mueller must have had his reasons for shading his commentary in that way rather than in the other direction: If they’d found adequate evidence to implicate Trump in a crime, or even “collusion,” they would have said that, too.

The statement Mueller chose to give carries with it an implication that his team looked for evidence of President Trump’s innocence but simply could not find it. With that in mind, I thought of a short list of questions I’d like to ask Mueller, if ever permitted to do so:

  1. What witnesses did you interview and what evidence did you collect in an attempt to exonerate Trump or prove him not guilty? (I believe the answer would be, “None. It’s not the job of a special counsel or prosecutor to do so.” Therefore, was Mueller’s comment appropriate?)

  2. Does it concern you that the FBI claimed “collection tool failure” in stating that 19,000 text messages between former FBI employees Lisa Page and Peter Strozk had been deleted and were unavailable for review by the Department of Justice (DOJ) inspector general? Is it worth investigating how the inspector general was able to recover the messages, when the FBI said it could not? Does the FBI lack the technical expertise, or the will? Isn’t it a serious issue that should be addressed, either way?

  3. Along the same lines, do you think it strange or inappropriate that the DOJ wiped text messages between Strzok and Page from their special counsel cell phones? The deletions happened shortly after they were ejected from the team and before the DOJ’s Office of the Inspector General could review them — at a time when all had been informed that their actions were under review. Did technicians attempt to recover the messages? Were the circumstances of the deletions thoroughly investigated?

  4. When did you first learn that the FBI and DOJ signed off on and presented unverified, anti-Trump political opposition research to a court to get wiretaps on an innocent U.S. citizen? Doesn’t this violate the strict procedures enacted while you were FBI director, intended to ensure that only verified information is seen by the court? Who will be held accountable for any lapses in this arena? 

  5. Do these issues point to larger problems within our intelligence community, in terms of how officials operate? Does that put you in a position where there’s a conflict of interest since you were in charge of the FBI when prior surveillance abuses were identified by the Foreign Intelligence Surveillance Court? Did you consider disclosing this potential conflict and stepping aside, or referring any issues that overlap with your interests?

  6. What steps did you take after Strzok and Page were exposed, to try to learn if other investigators on your team likewise were conflicted? Did you take action to segregate the work of these agents and any potential biases they injected into your investigation and team? Wasn’t their behavior a beacon to call you to follow an investigative trail in another direction? 

  7. Did you become concerned about foreign influence beyond Russia when you learned that a foreign national, Christopher Steele, claimed to have obtained opposition research from Russian officials connected to Putin — and that the FBI and DOJ presented this material to the Foreign Intelligence Surveillance Court to obtain wiretap approvals?

  8. Were you aware that some Democratic Party officials acknowledged coordinating with Ukraine in 2016 to undermine Trump and his associates and to leak disparaging information to the news media? 

  9. Is it true that you applied for the job as FBI director but Trump rejected you, the day before then-Acting Attorney General Rod Rosenstein appointed you as special counsel to investigate Trump? Does that put you in a potentially conflicted position?

  10. Do you think Donald Trump is guilty of a crime? If so, then do you believe he is perhaps the most clever criminal of our time since he was able to conceal the evidence despite all the government wiretaps, investigations, informants, surveillance and hundreds of interviews spanning several years?

Clearly, Robert Mueller hopes he has closed the book on his public statements about his investigation. If he has his way, he will not discuss the case further on the record. But his parting shot raised plenty of questions.

via ZeroHedge News http://bit.ly/2IfD3VI Tyler Durden

Less Jefferson, More Franklin

My reward for ten years of blogging is a guest post here. In all seriousness, I’m very grateful to Eugene and his co-conspirators for giving me the opportunity to write about my contribution to Our American Story.

Some of the essays in the book preach the faith that what makes our national experience special are the universal ideals of liberty and equality expressed in the Declaration of Independence and made concrete by the Constitution. My essay takes the opposite view. What made the United States distinctive was its political pragmatism. The emblem of that approach is Benjamin Franklin, the Founder who is rarely invoked by the Supreme Court. (Though, as Randy would surely point out, the Chief Justice did cite Franklin’s line about “death and taxes” in his opinion upholding the Affordable Care Act.) Franklin famously said at the close of the Constitutional Convention that he supported the proposal in spite of its many flaws. And his literary alter ego in Poor Richard’s Almanack once explained: “In the affairs of this world men are saved, not by faith, but by the want of it.”

Why do I say that our true national creed is pragmatism? Part of the answer is that this was the conclusion of the leading European commentators on the United States well into the twentieth century. Let me give you three examples. In Democracy in America, Alexis de Tocqueville remarked: “Nothing has made me admire the good sense and the practical intelligence of the Americans,” he wrote, “more than the way they avoid the innumerable difficulties deriving from their Federal Constitution.” Walter Bagehot, the founding editor of The Economist and author of a classic book on The English Constitution, wrote in the 1860s: “Americans now extol their institutions and so defraud themselves of their due praise . . . If they had not a genius for politics, if they had not a moderation in action singularly curious where superficial speech is so violent . . . the multiplicity of authorities in the American Constitution would long ago have brought it to a bad end. Sensible shareholders, I have heard a shrewd attorney say, can work any deed of settlement; and so the men of Massachusetts could, I believe, work any constitution.” And James Bryce, who served as Britain’s Ambassador to the United States from 1907-13, said that he was dubious of what he called the “tools” provided by the Constitution, but “[t]he defects of the tools are the glory of the workman.” What he meant was that “the American people have a practical aptitude for politics, a clearness of vision and capacity for self-government never equaled in any other nation.” “Such a people,” Bryce concluded, “can work any Constitution.”

I doubt that any foreign observers would say the same thing about the United States now. Political practice today more closely resembles Jefferson’s uncompromising ideals rather than Franklin’s common sense. Indeed, we are approaching the point where Barry Goldwater’s adage: “Extremism in the defense of liberty is no vice. And moderation in the pursuit of justice is no virtue” will be a description and not a slogan. The problem with even the best ideals is that they become dangerous fictions when taken literally. (Jefferson himself said many crazy things but almost always acted cautiously.)

Since a shared identity probably must be rooted in the nation’s Founding, my modest suggestion is that we elevate the Founder who was not a lawyer or a theorist. Franklin’s experience came from the most practical of pursuits–first as a publisher, then as a scientist, and finally as a diplomat. He was the pioneer of what we now call civic society in his adopted hometown of Philadelphia. As Franklin said in his proposal for what became the University of Pennsylvania, education should cultivate “an inclination joined with an ability to serve mankind, one’s country, friends and family.” So should politics.

from Latest – Reason.com http://bit.ly/2WIrDTO
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