Massachusetts Fines Morgan Stanley Over Facebook I.P.O.

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Morgan Stanley is paying for its role in the troubled stock market debut of Facebook.On Monday, Massachusetts’s top financial authority fined the bank $5 million for violating securities laws, the first major regulatory action tied to Facebook’s initial public stock offering.William F. Galvin, the secretary of the commonwealth of Massachusetts, accused the bank of improperly influencing the stock offering process. The regulator’s consent order asserts that a senior Morgan Stanley banker coached Facebook on how to share information with stock analysts who cover the social media company, a potential violation of a landmark legal settlement with Wall Street. While the banker never contacted the analysts directly, his actions, Mr. Galvin said, put ordinary investors at a disadvantage because they lacked access to the same research.http://dealbook.nytimes.com/2012/12/17/massachusetts-fines-morgan-stanley-over-facebook-i-p-o/And more criminal actions. These don't seem to be the exception. It is ingrained in the financial industry. QB

2 Former Hedge Fund Managers Found Guilty in Insider Trading Case

Two former hedge fund managers were found guilty on Monday of fraud and conspiracy, the latest convictions in the government’s campaign to eliminate illegal conduct on Wall Street trading floors.After two full days of deliberations, a jury convicted Anthony Chiasson, a co-founder of Level Global Investors, and Todd Newman, a former portfolio manager at Diamondback Capital Management. The two had denied charges that they participated in a conspiracy that made more than $70 million illegally trading technology stocks.Level Global and Diamondback were founded by former employees of SAC Capital Advisors, the $14 billion hedge fund run by Steven A. Cohen that has become a focus of the government’s insider trading inquiry. Mr. Cohen has not been accused of any wrongdoing, and his spokesman has said that Mr. Cohen acted appropriately.“With today’s guilty verdicts, Todd Newman and Anthony Chiasson join the ranks of high-level investment fund managers who are being made to answer for their extraordinarily bad risk-reward analysis about what is right and what is wrong,” Preet Bharara, the United States attorney in Manhattan, said in a statement.Both Mr. Chiasson and Mr. Newman sat stone-faced as the jury foreman announced the guilty verdict. After it was read, Mr. Newman slouched in his chair; Mr. Chiasson stared blankly. Judge Richard J. Sullivan, the judge presiding over the case, set sentencing for April 19. Until then, they are free on bail.Free on bail are you kidding me? They will be in the Grand Caymens before they are sentenced. QBhttp://dealbook.nytimes.com/2012/12/17/2-former-hedge-fund-managers-found-guilty-in-insider-trading-case/