Saturday, August 20, 2016

Three Things Make a Post

Upper level classes start next week, and I am scrambling to prepare.   So for my post, I’ll just drop some quick links to things I found interesting this week:

First, a nice long read for Saturday: How Lending Club’s Biggest Fanboy Uncovered Shady Loans. This is a deep dive into the story of a retail investor who dug into Lending Club’s loan data – and discovered that Lending Club was padding its loan data before the company confessed publicly.  He also seems to have discovered a pattern of repeat borrowers that the company has never disclosed.

Second, here is an editorial by a Deutsche Bank risk-officer-turned-SEC-whistleblower who says he is rejecting his reward, out of disgust that the company – and its shareholders – will be paying the fines that rightly should be charged to the company’s executives.  He blames the SEC's “revolving door,” pointing out that top SEC lawyers had formerly been employed by Deutsche Bank (though they were recused from the investigation).  The gesture would be slightly more impressive if it didn’t turn out that most of his reward is going to his lawyers, the experts he hired, and his ex-wife as part of his divorce settlement, and he doesn’t have the legal power to turn it down.  But he totally would if he could.*

Third, the jurors in the Sean Stewart insider trading trial report that their deliberations took a long time because they couldn't quite decide if the defendant received a "personal benefit" under United States v. Newman standards by passing tips to his father.  Obviously, whether a "benefit" is even necessary for a relationship this close is something that the Supreme Court is set to determine in Salman v. United States; in the meantime, it seems as though courts in New York are stuck asking about the quid pro quo between fathers and sons.  Harsh, man.  Couldn't the prosecutors have just argued that the father gave his son life?


*okay, I might be being unfair; his award is in excess of $8 million, so even after paying off everyone else, he may be rejecting a sizeable sum.  Still, it's funny that he's trying to turn down money that, um, belongs to his ex-wife.

Ann Lipton | Permalink


Fun post, Ann. But you're joking at the end of the post about the exchange of "life" for tipped information, right? Even leaving aside the possibility that a father is not a biological father, I sincerely doubt that would be the nature of the exchange (but I am not going to get into the details here on that . . .). Your quip does, however, if one thinks it through, point out some of the absurdity (from a factual point of view) in looking at familial and personal relationships in this tipper-tipped insider trading context . . . . Thanks for sharing.

Posted by: joanheminway | Aug 21, 2016 7:46:26 AM

Hee, yes, I was kidding - and that was exactly my point, it's a bizarre inquiry, that bears very little relationship to any policy goal.

Posted by: Ann Lipton | Aug 21, 2016 7:48:16 AM

Right on, sister! Thanks for the response, and I always love your cutting, dry sense of humor, even if I sometimes wonder whether I am spotting it correctly in the blogosphere. :>)

Posted by: joanheminway | Aug 21, 2016 8:20:33 AM

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