good afternoon and welcome to prime interest i'm harry i'm boring and i'm bob english it's your headline. it's official as they see capital is toast that would be cohen's hedge fund which posted annual profits of over twenty percent and once had fifteen billion dollars under management a grand jury indicted the firm alleging securities and to wire fraud and the head to find it may have to discard hundreds of millions even billions in profit then mr cohen is not himself indicted in fact the indictment doesn't even contain his name you simply refer to as the as a see owner so go on or it looks like you pulled records are in for no but he made three civil suits from the investors that may not get their money back by the way the soon to be defunct hedge fund accounts by some estimates to be ten percent of

daily stock market value at the new york stock exchange don't worry though high frequency traders have promised to pick up the very end organ breakstone insider trading later in the show and i'll do all steps on the very same topic but it won't be boring and with all the talk of tapering quantitative easing someone has decided to quantify just how much of ben's money printing had to give was corporate profits according to the director of market strategy and the brokerage firm in new edge that's about forty seven percent of the earnings of the top five hundred companies since two thousand he said q.e. is like an athlete on that steroids they have lance armstrong and get his tour de france titles and for doping maybe we could apply the same strategies to his chairmanship finally the super rich are heading for the exit in switzerland after getting burned by swiss bankers who sold them out for authorities for tax evasion hundreds of billions of francs police which were not only are they withdrawing cash

but they're doing safe deposit boxes the most important in the story though is what they're doing with their tash according to the speaker. story there investing in fine art fine wine and classic cars so gold isn't the only safe haven always follow the capital and right now it's an exit from cash we'll talk about the eurozone debt crisis with author and professor younis about a fight this in just a minute. and here is one thing you are running into its. i. euro zone sovereign debt reached an all time high in the first quarter of this year this is despite major government spending outback's now today the i.m.f.

said that the further central bank interest rate cuts might be necessary so what needs to be done to spark growth in europe earlier i spoke with jani but of vikas a professor of university of athens and author of the global minatory now i first asked him about the most recent version of his article a modest proposal for resolving the eurozone crisis is what he said. it's like you know these of these state of advanced disintegration that it finds itself in is because we have four cracks that i'm intimately connected to one another where the banking crisis as a result of the fact that we have a common that it's a. completely separate banking systems imagine living in the united states in two thousand and eight is the state of nevada that sound which their banks about going and and the banks on and that along with it and that would have caused a dominant factor destroying the whole of the dollars of the united states of america so we have to do that. the second crisis we have is

a crisis problem that we have a common currency but we have what i call the but in support of perfectly separable bets so every euro debt to the euro zone belongs to a single company unlike the united states where you have a common currency and you have a common dept in the form of the federal governments that in you have those no that whatsoever which is which sounds like you know from and what at least the point of huge sums by each of her debts but when you have a situation where you've got different states that belong to the eurozone and they don't have a federal. government or for that matter but if either of those serve a central bank to back the map at some point when they can't for some reason and of course that is was the major crisis when it comes to finance their debt completely bit isn't the only thing that can do it just go bankrupt default but that would set off a chain reaction of defaults that would bring down the thing so we need

a common only good for the models because it suggests a very simple way of the central bank of europe the e.c.b. two could. do act as a go between member states and financial markets. getting loans on the behalf of most. of its there and having them service them. so hopefully we'll have an investment because i was always happens happened it's happened everywhere when you have a financial sector implosion like the one in two thousand and eight the early can only crisis when the crisis goes from wall super main street the first casualty of course is investment best and brightest up and when you've got these banking graces and a segment that go dead. europe there are places like greece portugal ireland that need to the most investment not to be. able to produce incomes that

will help them pay their debts and look after their bank since them i don't want to get the least so what we need in europe is something like we need the ninety's everything we need to an investment led to recovery program and our suggestion the modest proposal is that they give up in investment banking that's in essence bank is a wonderful institution sometimes the size of the world bank and all that we need to do is simply go allow it to the job i'd bring about that govern you don't we're not doing it for political. action and not a much these let me let me read a quote to you that you said the eurozone feature is a central bank with no government and no national governments with no support of central bank arrayed against a global network of mega banks that they cannot possibly supervise are you advocating a fiscal union here and is that even feasible in the current environment when there's so much hostility among some of these member states especially between germany and the periphery. in short no ok and hey this is

clean but this is not part of the modest proposal what makes it modest is that we are not advocating if it's the union what we're saying is that we can deal with these problems without moving in if i don't know that action so that you know you'll be inside the bag if you recall the point i made earlier. would not be financing numbers thing you wouldn't have germany financing or buying the debt the reason what you would have is it a pencil bank. utilizing a good name in international international markets to borrow effectively on behalf of member states states but then have them repay those loans like you know parents good parents high credit worthiness. securing a mortgage and we have a youngster schools who's going wasn't very low and therefore the interstate to pay for their mortgages. and then have the youngsters. the beta looms it's the only way

we can salvage the news and with our vision of going well the end of the day are we just increasing dead are we shifting the burden of of borrowing from one entity to another maybe you can explain for our viewers how this is your modest proposal is a little bit different than what's going on currently in the in the euro zone. what we're doing now to increasing debt massively because in its wisdom the european union has decided to be consultants insolvencies of banks and insolvencies of states by lending money to the insolvent states and you know that these suicide the policy. suits are there because the conditions for lending that money how to use the income from which the old and the new debts will have to be debate so. adding debt on debts in an unsustainable fashion is precisely what's happening today and what we're suggesting in a modest proposal is that we do the opposite that we'd find

a smarter way of reducing the top of that burden of the eurozone over the next twenty years by having the you know bank. play this role that's mediated between member states. and money markets for the purposes of actually shrinking the amount of interest that will be able by the member states of the unit and also if you take into account the other problems that work with you or with the investment led government program all that the purpose of that is to shift idle savings and we have massive i've been saving saving a lot of that amount of money in year. too scared to be invested in the back of people by having to your opinion vest and banks that mountain of i've been saving see the best ones you journey in which the debt will be used and i would add that a lot of the horses. givings are actually at the federal reserve we've learned

these foreign branches of these banks in europe have over a trillion dollars just laying follow at the federal reserve but i want to get to some of these alphabet names a lot of people in the u.s. are going to be familiar with some of these programs we have the e.c.b. the b. the. the how do these fit into your particular program in which is the most important. not only important. these are the institutions will have and will have to use them we have to deploy them ration and the problem so fired is that we have used the infusion that we have. and other similar manner. and we've created unit. which was founded on sounds and ever that incapable of being strong enough to withstand the giving them so the whole point about them all this proposal is how to deploy that means that we have in

a manner that allows them to do their job and that is to defeat those before crisis face and see things. it's almost complete in europe we have a sense that banks like the united states as the federal reserve will at least. we have. an agency the european investment bank which can be thought of as if you want. potentially a new deal agency for effecting public investments it's been doing it's twenty five thirty years very successfully you know you talk about infrastructure all the new deal like the tennessee valley authority i mean are you talking about this is what europe needs to be doing in order to invest in itself. so that if you look at the map of europe for instance you find that the eastern part. which is part of the unit green. has infrastructure but they still the nineteen fifties and sixties. no

faster a connecting let's say greece austrian german and if such a train were to be built there are lots of us train guess who would benefit the most would be greece and. it will be germany because it's interesting because doing it and that kind of investment would be mutually advantageous for the whole of europe all we need to do is simply allow the you're going investment bank to go ahead and make that investment you have been investing in what bank can make the best and wants to make the best me but we still have you know we have a silly rule in europe where every investment has to be called financed by the national government we only have about thirty seconds left but who is era do you have with this modest proposal are you making any tread treadway whatsoever right now. very interesting story on the one hand behind the closed doors theories that interest you the most repulsive but when the

cameras are on and the microcosm switched on in a press conference. it's dead silence simply because. that was my interview with you on his way to fight this professor at the university of athens and author of the global minatory now you can read his modest proposal on his website but if i could study you coming up area and breaks down insider trading and not just the hedge fund there is more of the to it than you might think some even argue it should not be a crime at all after all those in congress seem to get away with it legally and within the community then i do it's about the very same subject as well as a rule do all of the year big beer versus the big banks so like them if you got in the state to.

give it possible to navigate the economy with all the details information and media hype will keep you up to date by decoding the main stream had. it been your.

as a seed capital advisors has been one of the most successful hedge funds on wall street accounting for anywhere between five and ten percent of the trading volume on the new york stock exchange and exchange for consistently high returns as they see charges their customers some of the highest fees in the industry however the firm has been under intense scrutiny over insider trading allegations and april as they see capital settled with the securities and exchange commission and paid a six hundred million dollars civil penalty but apparently that was not enough to satisfy the department of justice because today a federal prosecutors filed criminal charges against the firm alleging they were involved in a decade long insider trading scheme giving hundreds of millions of dollars of trust on its profits these charges could put billions of dollars at risk to be forfeit to the government the feds also want to band in individual residing inside

greenwich connecticut as they see owner for managing client money for the rest of his life. individual they are alluding to is stephen cohen insider trading is a very serious crime with civil and criminal penalties as thomas the choreo quoted in the wall street journal the message that's coming allowed in clear from the government is they're not going to tolerate insider trading on wall street to better understand what exactly as they see capital advisors did wrong let's break down the serious crime by definition insider trading is the buying or selling of security by someone who has access to material nonpublic information about the security essentially it's buying or selling stocks of a public company based on information that the public does not have access to the rules defining who is considered an insider are complex they could stretch as far as any person related to the company including broker employees and family members

but in general and a vigil insider would be any individual who gain from nonpublic information knowingly and then trades on that knowledge of the justification for in insider trading being illegal is because if you have inside information it would be fair it's other investors who don't have access to that so i'm also believe it raises the cost of capital and decreases overall economic growth as they see capital advisors is alleged to have hired numerous portfolio managers and research analysts who are engaged in a pattern of obtaining and tighter inside information from dozens of publicly traded companies and at times the recommended trades to the f.c.c. own are based on inside information specifically what as they see did it was they hired individuals who had close ties to the industries they were involved in these close ties could include someone who worked in the industry beforehand or simply someone who has colleagues and friends that work in the industry they traded in

other words employees were being paid for the relationships they have made throughout their careers but some argue with this should not be a crime because there are no victims involved here. making economic sense murray rothbart wrote a major difference between the crime of insider trading and other crimes is that insider trading is a crime with no victims very simply it's using sapir knowledge to make profits this is after all is what entrepreneurship and the free enterprise system is all a valid he claims there are no victims here because both parties the seller and the buyer profit even went to third party is involved you want to trade based on luck capital resources are better to be in the hands of the knowledgeable and then the lucky he goes on to make the case that in all other sectors ignoring businessmen would go out of business but only in the financial markets do we want the ignorant to have access to limited resources by a good luck limited capital resources should be rewarded to the most efficient and

who understands the markets best no one cried criminal when the top securities regulator cashed in of the top securities a lobbying firm but when wall street hires someone for their connections and relationships we call their profit illegitimate the revolving door is present in all sectors of government included but it seems as the latter who excuse the tension and punishment and that's the breakdown of insider trading now let's get to today's a legal. joining me is political commentator sam sax you little bit of trouble there i'm feeling comfortable in here a few times to sort of your jacket off my parents lose some time to all but all right first story big banks meet big beer large beer companies including miller

coors are putting pressure on the federal reserve to crack down on wall street miller coors a major aluminum buyer and that's the fed to talk food. oversight of banks like goldman sachs and j.p. morgan both banks are accused of manipulating aluminum prices by controlling large metal warehouses part of the london metal exchange network your thoughts so basically we have banks running a racket that's screwing over companies like these big companies that other companies that use aluminum the bigger picture here is this wall street the wall street economy the fire economy finance insurance real estate used to be about ten percent of our economy now it's now twenty five to thirty percent of our economy is starting to dominate our economy and it's doing that because it's preying on all the other industries in our economy through these rockets through price manipulation through all this stuff do we want an economy that functions based on manipulated fake money or do we want a condom either functions on actually building stuff and actually selling and

buying stuff now if you don't buy that kind of on your side here but i'm just going to play devil's advocate it only adds a tenth of a penny to each aluminum beer cans so it's not really coming through the case rumors anyway due to like three billion dollars that it to the penny adds up it's like the office space where they're just doing fractions of president superman what it is a lot of productions that stuff adds up for superman ok it is because wall street has been deregulated for decades now which is giving it the tools to be able to engage in this sort of manipulation in this predation on other sectors of the ok i'm going to add to your argument here goldman sachs and i was talking about this on news the other day goldman sachs has been in the commodities industry for decades they became a bank holding company in two thousand and eight that gave them access to fed money so yes they were already big and commodities and now they're even bigger because they have and we don't have these walls that separate them from the gambling side from the deposit or side j.p. morgan got into this in a big way they were involved in crude oil when the crude went from one hundred forty five dollars down to thirty dollars they just bought cargo ships or rented

and put them out to sea and waited for the price to rise and so there is a entire vertical industry now in the commodities market that's based on free money from the fed so. that is i agree the free money from the fed is making it worse for the banks and just a fact that the banks are even allowed to compete in these commodities markets is a big problem all right so we're in a little bit of agreement here and maybe allowed sort of we're just going to move on to the next subject as we talked about earlier stephen cohen and capital are back in the lot of the light the hedge fund was charged with wire fraud and securities fraud according to the new york times the charges were filed under the theory of corporate criminal liability now this allows the government to attribute employee criminal acts to a company itself and that makes sense because corporations are people right. mitt romney that's the certainty that is there i guess this is part of a sweep that it is doing here i know that's easy going on inside the f.c.c. during that whole government not cracking down on on insider trading and that's so

convenient let's go after the banker criminals who are basically committing acts against other banks because the objects who are trying to get the upper hand on other bankers but let's not go after the bankers who are trying to get the upper hand on consumers and on main street right. here is a problem is it's very easy to detect insider trading it's kind of hard to go after for the d.o.j. to go after and prove fraud in intent but the securities and exchange commission has had these algorithms in place in a modern monitoring system to monitor suspicious activity before very very civilians and so it is it's all about headline grabbing and say we're doing something but they're not going after the right to go after the people who are kicking millions of americans out of their homes on the legal documents the robo signing years let's not talk about the little rogue reciters i'm talking about the mainstay likely to be authorized that stuff going up let's go after those people and then we can also go after the and there's also the other problem of the revolving door i think one of the reasons that we're not going to as you see is not

going after these big banks is i mean the current head of the f.c.c. is mary jo white she came from a white shoe law firm and was representing these guys and she revolved. those doors three separate times so the people at the chart at the head of these agencies are very conflicted they don't want to go after they were going to use it had their agencies are from these industries and a whole other component of these intelligence firms that we're going to congress and these financial markets they're feeding whatever laws might be coming down the pike in congress giving that information to the banks so that they can profit off and ahead of time there is movement in congress to do something about that and then you know what has that got blown out kyra cantor thank you all right and spencer baucus the chair of the house banking committee finance committee ok we're going to move on to a final subject we've got about ninety second senator warren's proposal mccain's proposal to reinstate a form of glass steagall has attracted a lot of attention critics say the separation of commercial banking from investment banking wouldn't prevent another crisis will it i'm just going to repeat what

elizabeth warren said only that this is because she's starving because i don't think there's any counter-argument to this fact that from the founding of this country every ten fifteen years we've had a major banking panic and then after glass steagall in one nine hundred thirty two after the whole everything fell apart we went sixty seventy years without another major banking panic coincidence well i think it gets down to moral hazard when you have the federal reserve with a wink and a nod always willing to build somebody out and giving away free money that's the source of the problem now i do think that in the current system that we have we should have a wall but the thing is the dollar as it's proposed is not really going to give us any better solution because it's just going to shift one side to another it's not going to put a real wall like that was in place before there's too much money at stake here no absolutely i mean when we're talking glass steagall maybe we should be talking about the older one that was put in place that was much stronger it's hard to get something like that in place nowadays for all the reasons we've just talked about

over the last few minutes a revolving door of money in politics and sam we've got a red here so if you want to weigh on today's show be sure to like us on facebook at facebook dot com slash prime into. first you can follow suit here at sam's and you can follow me. but thank you so much for your vote on the dual. and it was an evasive day here at prime interest it seemed as though with the essays the owner is in the clear for now even though mr cohen's firm was handed down and went and burning he continues to walk towards the back door of his humble office on constitution avenue even as his favorite toy. five hundred has been

exposed as a cue manipulated friday and the rich move towards the exit door of cash they're collecting because those ports and vented you know very geo and then yawn as explained his proposal was as it may be to help your of exit its financial crisis then we explained in just how insider trading works and who may or may not be guilty of any wrongdoing and on that note we're going to sign off thanks for watching come back tomorrow from everyone at prime interest i'm sorry i'm boring have a good evening. let me let me we're going to let me ask you a point. here on this network which we're right in the bay we are none i'm

so. relieved to hear this sorry we're staying there to get married at the rate we're being. a result of surveillance. oh. led. us that was a new alert animation scripts scare me a little. there is breaking news tonight and we are continuing to follow the breaking news. alexander's family cry tears of joy at great things other than. the ever red orchid a quart of water. a lads' is a story made sort of movies playing out in real life. stories

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genuine indignation over america's worldwide surveillance or election point scoring germany pushes for time to data protection rules following accusations of government complicity with the n.s.a. . as washington seek sanctions against any nation offering edward snowden asylum r.t. talks exclusively to the leader of nicaragua one of the country ready to take in the fugitive whistleblower. the syrian opposition presses the us to hurry up in sending arms to the rebels ahead of talks between the u.n. security council and the anti assad leadership. and tear gas and clashes with police of protesters converging capital and rage by the assassination.