Why Is Cuban Facing a Fine When Martha Faced the Slammer?
With Dallas Mavericks owner Mark Cuban facing civil insider-trading charges (PDF) from the SEC, we got to wondering what it takes for securities fraud to become a crime.
The short answer: It depends on the prosecutor.
The SEC does not have authority to bring criminal charges -- it can only refer allegations to law enforcement. Then prosecutors decide whether to pursue a criminal case.
Prosecutors can be swayed by how egregious the allegations are or how much money is involved.
And they are more likely to target people who should have known they were breaking the law. People like Martha Stewart: a former stock broker, director of the New York Stock Exchange and one-time resident of the Alderson Federal Prison Camp for women. (In Stewart's 2004 insider-trading criminal case, a judge dismissed securities-fraud charges against her, but a jury convicted her of obstruction of justice.)
Bank Got Bailout, CEO Got Golden Parachute
The South Financial Group, South Carolina's largest bank, announced earlier this week that it had been approved to receive $347 million from the U.S. government. But the bank's founder and longtime CEO Mack Whittle won't be sticking around. He retired with an $18 million severance package in late October, two months earlier than had been expected. Because of the timing, he's free from golden parachute limits (PDF) that come with accepting bailout money.
"It smells like he moved the retirement date up to avoid [those limits]," said Paul Hodgson of the Corporate Library, a corporate-governance research firm. And the government's millions "make it a lot easier for the company to pay it out."
The move has proven controversial. After South Carolina's The State reported on suspicions of the deal's timing, Gov. Mark Sanford (R) called for the Treasury Department to investigate and said Whittle seemed to be "gaming the system." A spokesman for the governor said he had yet to receive a response from Treasury.
Rahmbo’s Revolving Door Revisited
Last week, we noted that Rahm Emanuel’s brief but profitable stint as an investment banker highlights the revolving door swinging between Washington and Wall Street. Two stories in particular, one from the Chicago Tribune in 2003 and the other from Fortune Magazine in 2006, have detailed Emanuel’s days as a banker, which earned him more than $18 million in less than three years.
Today, Politico examines a major deal Emanuel worked on as the Chicago-based managing director for the now-defunct investment bank Wasserstein Perella, headed by Bruce Wasserstein, a major Democratic donor.
Can Obama Reverse Bush’s Midnight Rules?
Whether it’s relaxing pollution-control standards for power plants or allowing loaded weapons into national parks, the Bush administration is scrambling to approve or change as many federal rules as it can before it hands off power to President-elect Barack Obama. This surge of "midnight regulations" presents a thorny question for the next administration: What can it do to void rules it thinks should be undone?
An Obama spokesman told ProPublica that the transition team can’t comment on the new administration’s strategy yet. However, John Podesta, a leading member of the transition team, has said Obama will use his "executive authority without waiting for congressional action" to reverse many of Bush’s policies.
But that authority has its limits.
Read the entire story at Politico.
How to Ferret Out Midnight Regs Yourself
Tracking the life of a rule through the federal bureaucracy is an arduous process, but here are some tips and Web sites to help you get started. For more detailed direction, watchdog group OMBWatch is a great resource.
But here's a short version:
The government's Unified Agenda provides a calendar of recent regulatory actions completed or proposed by various agencies. This is often where plans to create or change a rule are first made available to the public. Warning: the Unified Agenda only comes out twice a year, and the schedules aren't always up-to-date.
After the rule appears in the Unified Agenda, it enters the Proposed Rulemaking Stage and gets sent to the White House's Office of Management and Budget.
Here's where you can find rules are submitted to the OMB. The notice for a proposed rule is published in the federal register.
No More ‘Missing Voters’ in Alaska
It turns out, there really was "nothing fishy going on in the state of Alaska."
As of yesterday afternoon, 325,054 Alaskans voted in this year’s election. That’s more than the 313,592 who cast ballots in 2004, the previous record in voter turnout. So all the fuss about the supposedly low turnout in Alaska seems to have been misplaced.
The head of Alaska Division of Elections told us last week that the slow ballot count was due to the large percentage of Alaskans who voted early (go figure) and submitted absentee ballots. The final count, including overseas ballots, isn’t even in yet and won’t be until the state certifies the election on December 1.
Vendettas and Shady Ethics: Meet the Candidates to Replace Obama
Barack Obama's impending move to the White House has brought embattled Illinois Gov. Rod Blagojevich new-found popularity, at least among those vying to replace Obama in the Senate.
State law gives the Democratic governor the power to name Obama's successor through 2010. Blagojevich, whose administration faces multiple federal investigations, quickly found that there is no shortage of applicants.
"I've never had more friends than I do today," Blagojevich said at a news conference in Chicago just after the election. "We are going to be deliberate and very thoughtful and take our time to do it right."
But a look at Blagojevich's options shows that potential ethical lapses and political vendettas might make the "right" replacement difficult to identify.
For starters, a leading candidate, U.S. Rep. Luis Gutierrez (D-IL), once lobbied (PDF) Chicago Mayor Richard M. Daley to back a controversial multimillion-dollar real estate deal for a campaign contributor, a Chicago Tribune investigation found. Shortly before, the contributor had lent Gutierrez $200,000. The congressman's lobbying effort now is under "federal scrutiny," the investigation found.
Change.gov ‘Agenda’ Pages Are Back
The agenda pages that we told you disappeared from Change.gov, President-elect Barack Obama's transition Web site, have returned in newly retooled form. Within the 22-plus agenda categories are items that address how the new administration will increase transparency in government.
The technology page promises that the new administration will open government to citizens by using "cutting-edge technologies to create a new level of transparency, accountability, and participation for America's citizens." That agenda item, however, is listed below one promoting the protection of privacy -- one of the most common reasons the federal government has withheld information over the years.
The items listed on the new page are basically the same as before, but they are more tightly written and no longer include derogatory statements about the Bush administration such as: "The Bush Administration has been one of the most secretive, closed administrations in American history." Apparently, that's now a secret.
Bailout Update: The $350 Billion Bailout?
$350 billion is enough bailout for the time being. Treasury Secretary Hank Paulson says he won’t be asking Congress for the second installment of the $700 billion bailout. So it will be up to the Obama administration to decide whether that second half is spent.
Meanwhile, the Treasury continues to dole out the funds Congress has approved. Our list of the banks participating in the Capital Purchase Program – bailout bucks in return for equity stakes paying out 5% annually – is now at 67 banks with a total of $175.7 billion committed. The Treasury has actually doled out $148.6 billion of that, according to our tally and a recent Treasury report (PDF).
How to Track Midnight Regs
Our Market Crisis Coverage
AIG's Spiral Downward
AIG kept boasting about how the subprime mortgage crisis was no problem at all -- even as losses mounted.- ★ U.S.’ Method of Infrastructure Spending is Scattershot - NY Times
- ★ Growing Inmate Population Is Boon to Private Prisons - WSJ ($)
- Daschle Appt. Appears to Contradict Obama Ethics Policy - Public Citizen
- Palin’s Interviews Prompt Ethics Complaint - Anchorage Daily News
- Some Toys With Banned Plastics Will Stay on Market - Washington Post
- Auto CEOs Flew Private Jets to Plead for Public Funds - ABC News
- Cuban Lays Out Defense to Insider-Trading Charges - WSJ ($)
- AARP Orders Investigation Concerning Its Marketing - New York Times
- Mass.: Oppenheimer Execs Sold Before Market Froze - WSJ ($)
- Closing Gitmo Could Release Unrepentant Yemeni Terrorists - WaPo
- Trial Begins over California Prison Crowding - AP
More Links from 11/20 | Browse Category:
★ = editors' pick
- Bank Got Bailout, CEO Got Golden Parachute ProPublica, 11/19
- Treasury IG to Review New Tax Breaks New York Times, 11/19
- More
- Another Bailout? Transit Lobbyists Hit Up Congress For Help ProPublica, 11/17
- AIG to Pay Millions to Top Workers Washington Post, 11/14
- More
- Closing Gitmo Could Release Unrepentant Yemeni Terrorists Washington Post, 11/19
- Detainee Will Face New War-Crimes Charges New York Times, 11/19
- More
Scandals are selected by our editors and ranked in order of our assessment of intensity of coverage. How we do this. Are we missing something? .
Total committed so far: $177.8 billion
Last updated: Nov. 19, 2008 16:30 EST
Recently announced:
| Susquehanna Bancshares, Inc | $300 million |
| IBERIABANK Corp. | $115 million |
| Boston Private Financial Holdings | $150 million |
| Cathay General Bancorp | $258 million |
| Severn Bancorp | $23.5 million |
| Signature Bank | $120 million |
A ProPublica investigation finds that California nursing boards allow convicted violent felons, sex offenders, and drug dealers to have clean records as nurses
Buried Secrets: Natural Gas Drilling Harmful to Water?
Air Marshals: Undercover and Under Arrest Since 9/11, more than three dozen air marshals have been charged with crimes.
Was AIG Watchdog Not Up to the Job? U.S. regulators say they failed to grasp what pushed the company to the brink of collapse.
Rape Kit Backlog Grows Law agencies slow to use federal money for DNA analysis
Iraqi Army Headcount Unclear
Private contractor in charge of counting is criticized in audit
Degrees of Hank Paulson See where Wall Street's CEOs fit into Treasury Secretary Paulson's network.
History of U.S. Gov't Bailouts See How Past Gov't Bailouts Measured Up
The House Oversight Committee hearings continue with Fannie Mae and Freddie Mac finally taking the stage to discuss their role in the financial crisis (Time TBA).
