FBI press releases state that these cases were “brought in coordination with President Barack Obama’s Financial Fraud Enforcement Task Force, on which U.S. Attorney Bharara serves as a co-chair of the Securities and Commodities Fraud Working Group.” Government records indicate that President Obama created this tax force to “hold accountable those who helped bring about the last financial crisis.”
The obvious problem with this task force is that shady Clinton-era government housing policies initiated the financial crisis, not Wall Street. So, how can a government task force hold the government accountable?
The government’s Wall Street “watchdogs” are particularly tainted. The DOJ has notoriously blown taxpayer funds on extravagant conferences featuring $16 muffins, and, last spring, 33 Congressional probes uncovered high-level SEC employees using taxpayer time and equipment to indulge their addiction to porn.
Furthermore, economists including the widely recognized founder of the economic analysis of law, Henry Manne, argue that deregulating insider trading would benefit both the economy and society. UCLA School of Law Professor Stephen M. Bainbridge writes: “Insider trading is one of the most controversial aspects of securities regulation, even among the law and economics community. … Deregulatory arguments are typically premised on the claims that insider trading promotes market efficiency or that assigning the property right to inside information to managers is an efficient compensation scheme.”
The New York Times has reported that, “Insider trading does not appear to have any appreciable effect on the markets, at least as measured by the volume of trading that occurs.” The Guardian also reports that many insider prosecutions do little to anything to stop the practice, and, more importantly, the trading itself may not be inherently destructive to the market.
Bharara genuinely seems to think he’s whipping horrific crimes. But what is more scandalous? To threaten America’s food supply by ignoring and even facilitating drug cartel border violence (think Fast & Furious)? Or, to leverage your connections and cut backdoor deals on Wall Street—when there is no evidence that such trades hurt the economy?
Government waste and corruption is a far greater threat to the economy and society than insider trading. But when was the last time you saw a government regulator get perp-walked? I think the President’s task force could send a superior anti-corruption message by securing the border and attacking government waste.
U.S. District Judge Richard J. Sullivan in Manhattan suggested that historically high prison terms like Goffer’s and Rajaratnam’s: “…will be used to send a message to Wall Street.” And Wall Street represents capitalism. So, these men appear to be sexy scapegoats serving drawn-out prison terms to send an anti-capitalism message to the progressive mob.
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