So that's what they were doing! SEC Staff Viewing Porn

Upfront - this piece is a bit unfair, but the allegations are amazing. A story has been floating around for a few weeks about SEC staffers watching porn on government computers on government time. But Compliancex has a story that claims that no fewer than 16 investigations are currently underway into SEC employees who have spent up to an hour and a half a say viewing online porn

Government employees spending any time viewing porn while at work is bad enough, but what is more troubling is the fact that there are at least 16 investigations into it! What the heck does that mean? Are they investigating 16 SEC staffers, or are there really 16 separate investigations?

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Ex-IBM exec Moffat pleads guilty to securities fraud

Lest anyone believe that tipping without trading is not a big deal, a lesson to be learned. Robert Moffat, a senior executive at IBM pleaded guilty yesterday to conspiracy to commit securities fraud and securities fraud, in connection with his involvement in what is being called the largest insider trading case involving a hedge fund fraud in history. (One press report called it the largest hedge fund fraud in history. Unfortunately, it is not even close).

Moffat was not accused of trading on inside information, but rather he was accused, and plead guilty to disclosing inside information to the hedge fund. The press reports indicate that although the charges carry a maximum 25 year sentence, Moffat is expected to receive 6 months in prison.

He is not accused of receiving any financial benefit from the disclosures, and his motives for doing so will remain a mystery. But, his life has been destroyed, and I suspect there will be a SEC civil suit for fines and penalties.

The arrests in connection with the case back in October made significant headlines, (see this Bloomberg article for example) not only because of the scope of the alleged insider trading, but because of the investigative tactics used by the government. The investigation is reportedly the first time that wiretaps have been used in an insider trading investigation. More>>>

Mutual Funds and Social Media

Doug Cornelius has a blog post examing the use of social media by mutual fund companies. I didn't view every example that Doug has collected, but Putnam appears to be doing a pretty good job with Twitter. It looks like they have been at it for at least 6 months, updating with news about the company, webinars and other publicity posts. Now we need the banks to get on board. More>>>

GOP to Dems: Will you join us in voting to ban Viagra for sex offenders?

Is everyone as tired of the political games being played by our elected officials? Left, right, Democrat or Republican our government has become a morass of self-interested politicians who don't care about the country, or their constituents. They simply care about keeping their jobs, getting re-elected, and bashing the other party.

The Democrats showed their colors with the legislative games over the health care bill in order to get it passed, and the Republicans are now doing the same to defeat even after it is signed:

The idea is that by securing even a slight adjustment in the language, the Senate will have to send the bill back to the House of Representatives for reconsideration. Drawing out the process makes it more likely for it to be tripped up.

On Tuesday, the GOP put its strategy into action, with Sen. Tom Coburn (R-Okl.) introducing an amendment beyond agreeable. Titled “No Erectile Dysfunction Drugs To Sex Offenders” it would literally prohibit convicted child molesters, rapists, and sex offenders from getting erectile dysfunction medication from their health care providers.

While it will undoubtedly be difficult for Democrats to vote against the measure (one can conjure up the campaign ads already), the party plans to do just that.

How long after they vote on the Viagra amendment before we see a YouTube ad asking, “Why does Harry Reid want to give rapists erections”? Over/under is two days.

From Hotair.com More>>>

Advisors Allowed To Get Social

My article from On Wall Street this month, on use of social media by financial advisers.

There are numerous issues involved, and contrary to the statements made by some, this is not as simple as storing tweets. We are developing compliance and supervisory procedures for firms to use, building on FINRA's social media release, and the issues are numerous. Training, approval, supervision, monitoring, storage are all issue that need to be address before any firm allows their representatives to do anything more than put up a simple LinkedIn profile.

And you can be sure that FINRA is going to start including social media reviews in their next round of examinations. For many firms, it will be a "gotcha" violation, and too many examiners love "gotchas."

Once again, small firms are taking the lead in the use of social media, as expected. We can help your firm, and staff, understand the use of social media, create procedures to deal with these new communication tools, and implement those procedures to avoid costly exams and fines down the road.

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Toyota Hybrid Horror Hoax

Forbes looks at a potential bogus story of a stuck accelerator in a Pirus, full of 95 MPH driving, a police chase to stop the car, and a "victim" who is deeply in debt, and who owes Toyota money. More>>>

Regulators are from Mars, Investors are from Venus?

Interesting post over at The Conglomerate, identifying the differences between the regulators' view of the world and the investors' view of the world. It makes a good point - the financial markets cannot be regulated with more regulation, we need more investor education. More>>>