do you want me to put a bandage here no that's fine a lot of people were so exhausted they could barely walk their feet hurt and some of them straight to google reader i can retreat to wanted to keep going i don't know what tomorrow will bring.

as a c. 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 say capital settled with the security 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. a 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 ban and the vidual residing inside greenwich connecticut as they see owner for managing client money for the rest of his life. and the visual they are alluding to is stephen cohen insider trading is a very serious crime with civil and criminal penalties as thomas a 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 as they see owner 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 had 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 about 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 ignorant 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 market's 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 the very 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 toughen. 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 that 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 and 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 to have condom either functions on actually building stuff and actually selling and buying stuff now do you 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 can so it's not really coming through the case rumors anyway due to like three billion dollars so that 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 depositors 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 an 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 sac 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 about the certainty that i just there i guess this is part of

a sweep that is doing here are going on inside the f.c.c. doing federal 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 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 main see likely to be authorized that stuff going on let's go after those people and then we can also go after the entire trial there is 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 their phone as it had their agencies are from these industries and a whole other component are these intelligence firms that are between congress and these financial markets and they're feeding whatever laws might be coming down the pike and 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 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 counterargument 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 propose 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 to read 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 english but thank you so much for your vote on the really cool. 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 the s. and p. 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 forces and vented you know very geo and then yawn as explained his proposal just 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 everybody.

people white that going dahlan the mount of olives people walking is going on. they're doing jobs and they increasingly hate just for a small box apartment of extortion a run and pretty soon people are going to be stuck and trapped in a cycle of oppression and a new leader is going to come it's a pall he's. flip the switch and it's going to be. wealthy british. guys. happening to the global economy. i. will.

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