We certainly have come a long way from the days of 2004 when Martha Stewart served a 5 month sentence for insider trading. At the time Martha sold $200,000 worth of Imclone stock just before the announced failure of the experimental drug Erbitux. That transaction, on the advice of the doctor who worked on the drug, saved her $45,000 in stock losses but cost her jail time, house arrest and probation.
I am now convinced that had there been more zeros involved then none of Martha’s unpleasantness would have occurred.
Consider Jamie Dimon, the CEO of JP Morgan. According to former Attorney General Eric Holder, the jailing of so prominent a figure as Dimon would be too disruptive for the financial system of the United States. Corruption, illegality and criminality are secondary when it comes to the fines administered:
- Misleading CDO’s-$153.6 million
- Foreclosure and RoboSignings-$5.29 billion
- Mortgage Misrepresentations-$269.9 million
- Improper Foreclosures pt.2- $1.8 billion
- Electricity Trading Scandal-$410 million
- Illegal Credit Card Practices- $389 million
- The London Whale- $920 million, Fannie and Freddie Fines- $5.1 billion
- Institutional Mortgage Securities- $4.5 billion
- Misleading Toxic Mortgages-$13 billion
- Libor Rigging Scandal-$108 million
- Madoff Retributions- $1.7 billion
- Currency Manipulations- $1.34 billion.
That is certainly a lot of zeros. Mr. Dimon will be summering in the Hamptons.
Then there is Bill and Hillary Clinton who wouldn’t be caught dead with such a piddling as Martha’s $45,000 insider trade.
Over the past few years the Clinton Foundation has received millions in a pay to play format with the former Sec. of State. The Clinton Swedish slush fund collected $26 million which allowed the contributors to bypass Iranian sanctions. Most recently we’ve learned that both Bill and Hillary impart their words of wisdom for a mere $250,000 per hour.
It almost seems sacrilegious to mention Hillary’s spectacular cattle futures commodity trading account that made $99,537 on a $1,000 investment. Pocket change.
Bill and Hillary will be otherwise preoccupied with a Presidential campaign this summer.
That brings us to super golfer Phil Mickelson. It seems Phil, like Martha, gathered a bit of private information that motivated him to buy, in one company, 10 times the amount of stock in his entire portfolio. Some might conclude that this was inside trading since one week later he cashed out for a $931,000 profit. Of course learning that a take over bid was in the cards probably would give anyone the excuse to take action.
In 2016 political correctness dictates that if caught a simple apology followed by a fine, return of money or some kind of high profile activity is enough to satisfy the SEC. Phil of course has embraced two and will be succeeding Bill Clinton as the new ambassador for the Career Builder Challenge after writing a big check. Of course he also is expected to be joining Pres. Obama for a quick 18.
The LESSONS from Jamie, Bill, Hillary and Phil are clear for any aspiring “would be” criminal:
- Make sure the crime has significant zeros involved.
- In the event of discovery be prepared to admit that you didn’t quite understand your wrongdoing.
- Be prepared to offer up a fine or at worst return the money.
- Never attempt to hide but always be visible, in so doing make the accuser feel guilty for his or her accusation.
- Plan a really good summer activity.
Since the laws for the top 1% are made to be broken I have to wonder how Martha Stewart fell through the crack and was made to do time? Perhaps it is simply the difference between 2004 and 2016 and the real LESSONS had yet to be learned.