Saturday, May 22, 2010

DOJ: If You Are Going to Do It, Do It for Sex Not Money

The sex obsessed SEC thinking has rubbed off on the DOJ.

While most of what goes on as insider trading should be legal and not prosecuted DOJ style, the DOJ has now split hairs, in its extremely selective insider trading prosecutions--once more for the benefit of an insider, an IBM exec.

A DOJ attorney told the court that insider trading for sex is not as bad as insider trading for money. NyPo  reports on the madness:
It turns out he did have sex with that woman.

Federal prosecutors yesterday confirmed what many watchers of the Galleon Group scandal case have long suspected: Former IBM executive Robert Moffat had a relationship with the woman at the center of the largest insider-trading case in US history, hedge-fund consultant Danielle Chiesi.

The revelation came during a sentencing hearing for another player in the Galleon case, former hedge-fund honcho Mark Kurland, who was sentenced yesterday to a 27-month prison term for conspiring with Chiesi on illegal trades.

Kurland's defense lawyer, Patrick Smith, had argued in vain for a probation-only sentence for his client, noting that Moffat -- who leaked inside information as part of the wide-ranging scheme -- faces only six months under the term of his plea deal.

Prosecutor Reed Brodsky countered that Moffat, who was at one time in line to be IBM's CEO, made no money for his role, and was motivated solely by his "intimate relationship" with Chiesi, a Kurland underling.
I should note that there are no indications that the SEC or DOJ are investigating potentially serious insider trading.

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