1. High-Speed Trading Isn't About Efficiency - It's About Cheating →

    "HFT funds aren’t allocating capital to where they think it’ll be most productive. HFT funds are allocating capital to where they think other people will put it 50 milliseconds from now. It’s a tax on everybody else. And it’s a tax that has basically no benefit. Sure, HFT funds defend themselves by saying they’re increasing liquidity, but increasing liquidity is the last refuge of bullshitters." - Matthew O’Brien for The Atlantic

  2. Vatican's new bank chief has military ship links →

    The Vatican was drawn into a new controversy Friday after acknowledging that its bank’s new president is also chairman of a shipbuilder making warships — a significant conflict for an institution that has long shunned ties to military manufacturing.

    - Associated Press

  3. Wall Street CEOs, investment bankers charged prostitutes on corporate cards, madam says →

    Wall Street CEOs, lawyers, bankers and media executives chalked up thousands of dollars in prostitution charges on their corporate credit cards — swiping their cards for $2,000 an hour prostitutes, according to a New York madam who pleaded guilty last year.

    Kristin Davis, the madam in question, went public to ABC News this week; ABC will be broadcasting her interview Friday at 10 pm. Davis says she has a list of 9,800 clients, many of whom she says New York prosecutors deliberately avoided when taking her case, even though she offered them her annotated client list.

    - John Byrne, for Raw Story

  4. Matt Taibbi and Chrystia Freeland on the One Percent’s Power and Privileges
    The One Percent is not only increasing their share of wealth — they’re using it to spread millions among political candidates who serve their interests. Example: Goldman Sachs, which gave more money than any other major American corporation to Barack Obama in 2008, is switching alliances this year; their employees have given $900,000 both to Mitt Romney’s campaign and to the pro-Romney super PAC Restore Our Future. Why? Because, says the Wall Street Journal, the Goldman Sachs gang felt betrayed by President Obama’s modest attempts at financial reform.

    To discuss how the super-rich have willfully confused their self-interest with America’s interest, Bill is joined by Rolling Stone magazine’s Matt Taibbi, who regularly shines his spotlight on scandals involving big business and government, and journalist Chrystia Freeland, author of the new book Plutocrats: The Rise of the New Global Super Rich and the Fall of Everyone Else.

  5. Big Boys Gone Bananas
     
    How far will a big corporation go to protect its brand? Swedish filmmaker Fredrik Gertten’s experienced this recently. His previous film BANANAS!* (IDFA 2009) recounts the lawsuit that 12 Nicaraguan plantation workers brought against the fruit giant Dole Food Company. The film was selected for competition by the Los Angeles Film Festival. Nothing wrong so far, right? But then Gertten gets a strange message: the festival removes Bananas!* from competition. Then a scathing article appears in the Los Angeles Business Journal about the film, and Gertten subsequently receives a letter from Dole’s attorney threatening him with legal action. What follows is an unparalleled thriller that has Gertten capturing the entire process - from Dole attacking the producers with a defamation lawsuit and bullying scaretactics, to media control and PR spin. This personal film reveals precisely how a multinational will stop at nothing to get its way - freedom of speech is at stake. As Dole’s PR company puts it, “It is easier to cope with a bad conscience than a bad reputation”.

  6. We should sink Todd Akin. If he’s found mysteriously murdered, don’t look for my whereabouts!

    — Karl Rove, at an private billionaire fundraiser for his right-wing mega-PAC, American Crossroads

  7. Wired: Hundreds of DHS employees arrested for drug smuggling, child porn →

    Border Patrol agents smuggling weed and coke. Immigration agents forging documents and robbing drug dealers. TSA employees caught with child porn. Those are just a few of the crimes perpetrated by Department of Homeland Security employees in just the past year.

    Since the creation of the Department of Homeland Security nearly a decade ago, the agency’s inspector general has been tasked with uncovering corruption, waste and criminality within its own ranks. The IG has had his hands full.

    According to a newly released DHS inspector general’s summary of its significant investigations, 318 DHS employees and contractors were arrested in 2011 (.pdf). That’s about one arrest per weekday of the men and women who are supposed to be keeping the country safe. The report lets us not only see how corrupt some agents tasked with protecting the homeland can be, it also gives us a scale of the problem. In short: There are a lot of dirty immigration and border officers.

  8. US ends investigation of terror detainees' deaths without charges →

    U.S. Attorney General Eric Holder announced the investigation into the deaths of two suspected terrorists  who died in CIA custody — one in Iraq and another in Afghanistan — was ended without charges because “the admissible evidence would not be sufficient to obtain and sustain a conviction beyond a reasonable doubt.” 

    The investigation spanned more than four years. It began with an investigation into the CIA’s destruction of videotapes of aggressive interrogations of terrorist suspects, but was later expanded to include the deaths of the two detainees. 

  9. A Transactional Genealogy of Scandal: from Michael Milken to Enron to Goldman Sachs →

    Three scandals have fundamentally reshaped business regulation over the past thirty years: the securities fraud prosecution of Michael Milken in 1988, the Enron implosion of 2001, and the Goldman Sachs “Abacus” enforcement action of 2010. The scandals have always been seen as unrelated. This Article highlights a previously unnoticed transactional affinity tying these scandals together—a deal structure known as the synthetic collateralized debt obligation (“CDO”) involving the use of a special purpose entity (“SPE”). The SPE is a new and widely used form of corporate alter ego designed to undertake transactions for its creator’s accounting and regulatory benefit.

    The SPE remains mysterious and poorly understood, despite its use in framing transactions involving trillions of dollars and its prominence in foundational scandals. The traditional corporate alter ego was a subsidiary or affiliate with equity control. The SPE eschews equity control in favor of control through pre-set instructions emanating from transactional documents. In theory, these instructions are complete or very close thereto, making SPEs a real world manifestation of the “nexus of contracts” firm of economic and legal theory. In practice, however, formal designations of separateness do not always stand up under the strain of economic reality. 

    William W. BrattonUniversity of Pennsyvlania Law School; European Corporate Governance Institute (ECGI); Adam J. LevitinGeorgetown University Law Center

  10. Reuters: U.S. banks told to make plans for preventing collapse →

    U.S. regulators directed five of the country’s biggest banks, including Bank of America Corp and Goldman Sachs Group Inc, to develop plans for staving off collapse if they faced serious problems, emphasizing that the banks could not count on government help.

    The two-year-old program, which has been largely secret until now, is in addition to the “living wills” the banks crafted to help regulators dismantle them if they actually do fail. It shows how hard regulators are working to ensure that banks have plans for worst-case scenarios and can act rationally in times of distress.