The SAC Indictment: Analysis


This is much worse than is being let on.

I’ve read the indictment.  The allegation is that the firm is, at its essence, a criminal enterprise and that it “makes money” through systemic insider trading.

In addition to the indictment is a demand for civil forfeiture of the “instruments” of the crime.

That, if it was to be sustained, means your money if you have funds there, and what’s worse is that you can’t evade this by pulling your funds now as they will be clawed back.

Note that in point of fact you don’t have to have even suspected that the profits were “earned” via illegal acts to have them seized by the DOJ in these sort of civil forfeiture actions.  You simply need to have “profited” from them!

SAC Indictment

The civil forfeiture, I also remind you, only requires civil standards of proof (“preponderance of the evidence”) which means the DOJ can lose the criminal case and still get your money, and what’s worse is that once cause is shown SAC will have to prove the funds did not come from unlawful acts in order to avoid having them seized.

I cannot, of course, draw a conclusion as to whether the charges are true and the case will drag on for quite some time.  But this is exactly the sort of case that should have been brought, in my opinion, against various bankster institutions that packaged up and sold things they claimed internally were “vomit”while selling them as “good investments” to clients and other institutions.

Prosecution of criminal wrong-doing is good.  But selective prosecution is very bad, because it leads people to seek to become “special” so they can engage in, with impunity, that which gets everyone else indicted.

I will be watching this case with great interest as it develops…

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