Home > Uncategorized > Spitzer’s Charges Face a Challenge

Spitzer’s Charges Face a Challenge


“For more than three years now, New York Attorney General Eliot L. Spitzer has been reshaping the financial services industry, forcing out players he considers bad apples and extracting billions of dollars in fines from mutual fund companies, stock analysts and others in the industry. But not, former Bank of America Corp. securities broker Sihpol is expected to take on Spitzer when he goes to trial today on 40 criminal charges for his role in helping a hedge fund place after-hours trades that Spitzer says are illegal. Sihpol is not the only one of Spitzer’s targets fighting back. Former New York Stock Exchange chief Dick Grasso is challenging Spitzer’s effort to make him return his $139.5 million in retirement compensation. But Sihpol’s case is the first to go before a jury, and, unlike Grasso, he is facing criminal charges.”

This article just showed me that when you are shady, it will all come back to haunt you. The main point I got out of this is that when one goes down, they all go down. The point being that, when one get caught– they all start telling on there friends who are doing something wrong in the financial industry.

“But Stewart and the defense team say things are not that clear. The Securities and Exchange Commission regulation in place at the time of the trade does not use the words 4 p.m. Rather it simply states that all mutual fund orders placed after a fund has computed its daily price must get the next day’s price. In practice, many funds do not calculate their daily price — called a net asset value — until nearly 5:30 p.m., although that calculation is based on the value of the funds’ component stocks, and those prices are set at the 4 p.m. market close.”

“There’s no statute that says 4 o’clock. There’s no manual that says 4 o’clock. This would be a very different case if there was,” Stewart said.

So, this is going to be a good case to see how all this plays out in the end. There are a lot of grey areas in this area and it going to be an interesting to see who wins this argument. I believe that there are some shady things going on with Bank of America, and I think that the head of the hedges department needs to pay the price for what he was doing with the mutual funds.

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