Insider trading masih sulit dibuktikan
Oleh Irvin Avriano A.
Minggu, 11 Desember 2011 | 16:05 WIB
CISARUA: Badan Pengawas Pasar Modal dan Lembaga Keuangan (Bapepam-LK) masih sulit membuktikan adanya transaksi orang dalam (insider trading).
“Meskipun saya pernah di Biro Pemeriksaan dan Penyidikan, tetapi saya belum pernah bisa membuktikan insider trading.” M. Noor Rachman, Kepala Biro Transaksi Lembaga Efek Bapepam-LK, pada pelatihan wartawan, Minggu 11 Desember.
Meskipun demikian, dia menambahkan saat ini payung hukum untuk mencegah atau menanggulangi potensi terjadinya perdagangan orang dalam itu sudah siap.
Beberapa pelanggaran dalam perdagangan efek yang paling berat hukumannya ada tiga macam, yaitu penipuan, manipulasi perdagangan, dan insider trading. Setiap pihak yang terbukti melakukan pelanggaran jenis itu akan dipidana 10 tahun penjara atau denda Rp10 miliar.
Kasus lain yang juga sudah memiliki payung hukum, tutur Noor Rachman, adalah aksi penyudutan harga serta manipulasi untuk menggelembungkan atau menurunkan harga saham di pasar.
Otoritas pasar modal memiliki ketentuan pidana untuk aksi pelanggaran berbentuk penipuan, manipulasi perdagangan, dan perdagangan orang dalam, yaitu penjara 10 tahun atau denda Rp10 miliar. (ea)
Hedge-Fund Star Guilty of Insider Trading
By AP / TOM HAYS Wednesday, May 11, 2011
(NEW YORK) — A former Wall Street titan was convicted Wednesday of making a fortune by coaxing a crew of corporate tipsters to give him an illegal edge on blockbuster trades in technology and other stocks — what prosecutors called the largest insider trading case ever involving hedge funds.
Raj Rajaratnam was convicted of five conspiracy counts and nine securities fraud charges at the closely watched trial in federal court in Manhattan. The jury had deliberated since April 25, and at one point was forced to start over again when one juror dropped out due to illness. (See the Top 10 Crooked CEOs)
Prosecutors had alleged the 53-year-old Rajaratnam made profits and avoided losses totaling more than $60 million from illegal tips. His Galleon Group funds, they said, became a multibillion-dollar success at the expense of ordinary stock investors who didn’t have advance notice of the earnings of public companies and of mergers and acquisitions.
The verdict came after seven weeks of testimony showcasing wiretaps of Rajaratnam wheeling and dealing behind the scenes with corrupt executives and consultants. Some of the people on the other end of the line pleaded guilty and agreed to take the witness stand against the Sri Lanka-born defendant.
Authorities said the 45 tapes used in the case represented the most extensive use to date of wiretaps — common in organized crimes and drug cases — in a white-collar case. See pictures of TIME’s Wall Street covers.
The defense had fought hard in pretrial hearings to keep the avalanche of audio evidence out of the trial by arguing the FBI obtained it with a faulty warrant. Once a judge allowed them in, prosecutors put the recordings to maximum use by repeatedly playing them for jurors. “You heard the defendant commit his crimes time and time again in his own words,” Assistant U.S. Attorney Reed Brodsky said in closing arguments. “The tapes show he didn’t believe the rules applied to him,” the prosecutor added. “Cheating became part of his business model.”
The wiretaps appeared to play prominently in the jurors’ deliberations: They asked to return to the courtroom countless times so they could listen to them again.
The defense argued that the tapes revealed nothing more than that Rajaratnam was doing his duty by asking questions about information already circulating in the “real world” of high finance. “That happens every day on Wall Street,” he said. “There’s nothing wrong with it.”
Former financial consultant Anil Kumar testified that he and Rajaratnam — his former classmate at the University of Pennsylvania’s prestigious Wharton School — broke the law by speaking regularly about the negotiations over the acquisition of ATI Technologies Inc. by Kumar’s client, Advanced Micro Devices Inc., before the deal was announced. “I told him that this was ‘red hot’ and shouldn’t be discussed,” Kumar said. Later, he said he cautioned the defendant, “This is going to be a complete shock to the industry … so treat this with the strictest of confidence.”
Prosecutors say Rajaratnam raked in $20 million by trading on his advance notice of the ATI-AMD deal. Afterward, he called Kumar at home and said, “You’re a star,” Kumar told the jury in federal court in Manhattan.
Associated Press writer Larry Neumeister contributed to this report.
Bapepam: Sulit Jerat Insider Trading
kejahatan TERBESAR DI BURSA GLOBAL ADALAH fenomena insider trading: notorious names such as Rajaratnam, Ivan Boesky, etc
Oleh: Mosi Retnani Fajarwati
Pasar Modal – Sabtu, 7 Mei 2011 | 12:05 WIB
INILAH.COM, Jakarta – Ketua Badan Pengawas Pasar Modal dan Lembaga Keuangan (Bapepam-LK) Nurhaida akui sulitnya menjerat pelaku insider trading.
Nurhaida mengatakan, insider trading memang merupakan transaksi yang dilarang. Insider trading adalah adanya informasi ‘orang dalam’ yang dipakai pihak tertentu untuk melakukan transaksi yang kemudian merugikan pihak lain atau memberikan keuntungan lebih.
“Itu tidak mudah untuk dibuktikan karena bisa saja info secara lisan tidak ada buktinya. Negara lain termasuk AS, yang sudah maju sistem pasar modalnya butuh waktu 3-4 tahun untuk membuktikan dan juga jarang yang terungkap,” papar Nurhaida di kantor Kementerian Keuangan, Jumat (6/5) malam.
Ia melanjutkan, di Indonesia sendiri bahkan belum pernah ada kasus insider trading yang terungkap sejak berlakunya undang-undang pasar modal pada tahun 1995. “Karena memang pembuktiannya sangat sulit, tapi tidak berati Bapepam tidak melakukan apa-apa, kita tetap melakukan inforcement sesuai peraturan yang ada,” tegasnya.
Namun, ia mengatakan, undang-undang pasar modal yang ada saat ini belum butuh direvisi. Pasalnya, menurut Nurhaida, undang-undang yang ada saat ini cukup terperinci dalam mengatur insider trading. “Apa yang dimaksud insider trading, transaksi apa yang dipebolehkan dan tidak diperbolehkan dan peraturan itu saya rasa sudah cukup,” ujarnya.
Ia menilai, saat ini yang dibutuhkan adalah usaha yang lebih keras lagi untuk bisa menjerat pelaku insider trading. “Saya tidak mau komentar terlalu jauh karena memang di Indonesia belum ada yang dijerat. Jadi perbaikan bukan pada regulasi tapi lebih ke upaya pembuktiannya,” pungkasnya. [mre]
Massive Insider Trading Investigation Could Nail Wall Street’s Biggest Names
The government is reportedly close to filing charges in the largest institutional insider-trading investigation in history.
According to initial reports, the investigation could ensnare Wall Street’s biggest names: Goldman Sachs, SAC Capital, Wellington, Jennison, MFS Global, Maverick, Citadel, and others. (Here’s a who’s who of who might get nailed.)
The investigation reportedly focuses on “expert networks” — consulting firms that pay industry participants to share insights and information with investors. Professional investors use these networks to gather information about real-time business conditions and trends in various industries (as well as, sometimes, information that could likely be characterized as “inside” information in any other context).
No matter where the investigation ends up, the government will likely present it as a huge step toward making the market “fair” for small investors. And the same small investors will likely view it as confirmation that the “game is rigged.”
Both of these conclusions will miss a far more important point.
The REAL lesson most investors should take away from the largest institutional insider-trading investigation in history is that competition in the global financial markets is so intense that it’s basically idiotic to trade.
Trading is what is known as a “zero sum game.” To win, you have to beat the competition. (And you have to beat the competition by more than the amount that it costs you to trade, which is extraordinarily hard to do, especially after tax).
In our experience, most investors have no appreciation for how intense their competition is. They think, “Wow–look at all this information I have. Look at all my trading screens. Look at all my SEC filings. Look at my charts and graphs. Look at the smart fellow on TV telling me what to buy. Look at how many of my trades have made money!”
What they miss is that their competition has all this information, too — so it doesn’t give anyone an edge. They also don’t understand that, in addition to all this information, the folks they are competing with have millions and millions of dollars to spend gathering information that will never be published anywhere or appear on an screen or chart or graph.
That’s where the expert networks come in. That’s where contact networks in general come in. That’s where one-on-one meetings with managements and suppliers come in.
One glance from a CEO in response to a pointed question can contain more information than 500 pages of SEC filings. One nugget of scuttlebutt about the status of an important contract can make you more money than 500 hours of studying charts and graphs. Most small investors don’t understand that their competition gets this sort of information all day long.
In short, it doesn’t matter whether the trading game is played on “a level playing field” (and of course it isn’t.) The New York Jets will still destroy any high-school football team, no matter what field the game is played on.
From the perspective of small investors, the game that is played every day in the global financial markets is equivalent to the New York Jets vs. a high-school football team. And it should be no mystery which team the small investors are playing on.
So what’s the smart answer for small investors in a world in which the competition is so unbelievably intense?
Don’t play the trading game.
Instead, play a game you can win.
What’s that game?
Long-term investing, preferably via low-cost, tax-efficient index funds.
Unlike professional investors, small investors don’t have to worry about their performance in a given week or month or year. They can avoid the second-to-second warfare that defines the professional investment business. They can be patient and allow Ben Graham’s long-term “weighing machine” to eventually do its work.
If they do that, and keep their costs low enough, they’ll outperform 75% or more of the professionals.
Just as important, they won’t be willingly playing a game they are almost sure to lose.
Hedge-fund partner Raj Rajaratnam leaves Manhattan Federal Court after a Nov. 5 bail hearing in New York City
Phone taps, FBI surveillance, confidential informants — it’s the stuff of major mafia investigations and Law & Order reruns. But they’re also the tactics used by federal authorities against a slew of dark-suited desk jockeys accused in Wall Street’s largest insider-trading scandal in decades. Authorities say billionaire hedge-fund manager Raj Rajaratnam, founder of the Galleon Group, and 19 others illegally used secret information about public companies to inform investments that yielded some $60 million in profits over the past several years. The defendants, who also include traders, lawyers and executives at firms such as IBM and McKinsey & Co., now face hefty fines and years behind bars.(Read “Arrests Open a Window on Hedge-Fund Culture.”)
It requires only a kindergartner’s sense of justice to understand why insider trading is a Wall Street no-no: it’s unfair. Simply put, insider trading means buying or selling stocks, bonds or other securities based on significant information that’s not available to the general public. Besides creating an uneven playing field that disadvantages regular investors, insider trading by corporate officials also violates their responsibility to operate in the best interests of shareholders.
Insider trading hasn’t always been a crime. On the contrary, it was once considered logical and efficient to let any competitive advantage inform decision-making in the free market — a position many economic libertarians continue to embrace today. What some consider to be America’s first insider-trading scandal took place shortly after the nation’s birth; a former Assistant Treasury Secretary named William Duer capitalized on his government connections to make bets on the country’s debt. His investments eventually soured, however, and Duer’s bankruptcy brought down much of New York’s economy in 1792; he died a few years later in debtors’ prison. (The charter members of the Buttonwood Group, the predecessor of the New York Stock Exchange, first assembled to formulate a response to that market crash.) Nineteenth century railroad magnate Jay Gould didn’t try to hide his flagrant insider trading; profits from buying and selling stock in his own companies helped make him one of the wealthiest men in U.S. history.
The first real crackdown against the practice came in 1909, when the U.S. Supreme Court ruled that that a director of the Philippine Sugar Estates Development Company committed fraud when he bought stock in his company without sharing information with the seller that soon boosted its value. But it wasn’t until after the 1929 stock-market crash that Congress passed laws to limit such trading (although it didn’t move to ban it outright) and created the Securities and Exchange Commission to enhance market oversight. As the stock market expanded in the 1960s, the SEC grew more aggressive in fighting insider trading, relying on a general prohibition against securities fraud. In 1987, the Supreme Court ruled that a formerWall Street Journal reporter, R. Foster Winans, and two associates were guilty of mail and wire fraud for trading on names mentioned in upcoming editions of the newspaper’s “Heard on the Street” columns. Winans was sentenced to 18 months in prison, although the court split on whether his actions also constituted illegal insider trading.(Read “What’s Still Wrong with Wall Street.”)
The 1980s were a monument to Wall Street excess, witnessing some of the most notorious insider-trading prosecutions in history. Corporate raider Ivan Boesky — said to be an inspiration for the fictional Gordon (“Greed … is good”) Gekko, villain of the Oliver Stone film Wall Street — was sentenced to 3½ years in prison and fined $100 million in 1986 for insider trading. Financier Michael Milken, the “junk-bond king” who famously earned $550 million in 1987, avoided prosecution on similar charges by pleading guilty to other criminal counts. But the largest insider-trading conviction came two decades later, in 2007, when former Qwest Communications head Joseph Nacchio was convicted of selling $52 million in company stock while knowing the company was headed for trouble. He was sentenced to six years in prison, though an appeals court later ordered his sentence reduced.
These days, you don’t have to work on Wall Street to get entangled in an insider-trading scandal — just ask Martha Stewart. The homemaking guru spent five months in prison in 2004 after a series of events triggered by her sale of $228,000 in shares of biomedical firm ImClone Systems, the day before its value plunged 15%. Thanks to a 1997 Supreme Court ruling, even those who lack a connection to a company cannot trade on inside information if they know it is meant to remain confidential. (ImClone was run by Stewart’s friend, Sam Waksal.) Ultimately, Stewart was not convicted of insider trading, but of lying to authorities and obstructing justice during the investigation.(Read “How Washington’s Bailout Will Boost Wall Street Bonuses.”)
Meanwhile, a mastermind of one of the most elaborate insider-trading schemes in recent history remains on the lam. David Pajcin, a former Goldman Sachs analyst, pleaded guilty in 2006 of running a $6.7 million scam that authorities first detected when a retired underwear seamstress in Croatia earned $2 million in profit from a suspicious, two-day investment in Reebok. The 63-year-old, who did not own a computer, was Pajcin’s aunt; he traded stocks in her name and in the name of an exotic dancer he was dating to escape scrutiny. In one ploy to glean inside information, Pajcin and an accomplice, former Goldman colleague Eugene Plotkin, hired workers in the Wisconsin printing plant where BusinessWeek was published to filch copies of the magazine straight from the press to discover which companies would be mentioned. Plotkin pleaded guilty and was sentenced to nearly five years in prison. Pajcin served two years before being released, and promptly disappeared — possibly leaving the country. Once he’s tracked down, he faces more jail time for violating his probation.
Bad Boys, Bad Boys
Whatcha gonna do? Slam-dunk prosecutions keep Wall Street on the straight and narrow. But not for long. Why every generation has to learn the same lesson.
By James J. Cramer
Seventeen years ago, Ivan Boesky ushered me into a conference room in his palatial digs above Piaget on Fifth Avenue. I had come to see the most famous arbitrageur in America to talk about bumming some office space for my nascent hedge fund. I had met Boesky multiple times before, both at work and at charity events—he was a huge giver—and he was always gracious and gentlemanly, almost scholarly in his demeanor.
I had my reservations about connecting with Boesky, though. It was pretty much an open secret that he trafficked in inside information. My boss at Goldman Sachs, Bob Rubin, had told me repeatedly to be careful of Boesky. Funny thing, it mattered to ethical people like Rubin, but it didn’t appear to matter to the Feds. As long as it didn’t seem to matter to the Feds that he bought stocks ahead of takeovers, why should it matter to anyone else? At least that’s what went through my mind when I visited Boesky.
On the long walk down to Boesky’s conference room, I passed vacant office after vacant office and halls lined with packing cartons. Boesky, almost always tanned and relaxed, seemed edgy and gaunt that day. You could tell he didn’t want to chitchat. In fact, he seemed eager to get rid of me. Curtly, he asked what he could do for me. I told him I wanted to borrow some of his spare office space. No, he said, there was no room for his people as it was. I told him that I just needed a little space and that it looked like he had a lot of it. No, he said, he didn’t, he had no spare room at all. He kept swinging his head from side to side, distracted, almost goofy in his lack of attention. I looked at him like he was nuts. But you didn’t push a kingpin like Boesky. Suddenly, he got up and said he had to run off and he left me to find my way out.
Weird, I said to myself as I walked back to my studio apartment on East 72nd Street. What the heck was that about? What’s eating Boesky? And then, at home, I put on the TV to watch the Nightly Business Report on PBS and saw a picture of Ivan Boesky flashing along with the news that shortly after the close of the market, the Feds had busted him for insider trading. He was cooperating with the government—in fact, he had been undercover for the Feds for the past few months, building cases against others with whom he had trafficked in inside information. The Feds had been watching and listening in the next room during our meeting that day.
With Boesky’s arrest, an era ended. The government, which seemed to look the other way as people made big bets with inside information, had decided to put an end to the practice. In another year’s time, after a series of high-profile perp walks and indictments, no one would dream of trading on inside information. The arrests changed the game; if you found out news before you should have, you closed your eyes to it. Too dangerous; you’d get caught just like Boesky, or Marty Siegel, the most important investment banker of that time, or, alas, Michael Milken, the most powerful financier of the era.
“The mutual-fund boys were in middle school when Boesky was busted.”
In fact, at the height of the prosecution’s zeal, many of us thought they went after the guilty and the innocent. You and your colleagues lived in fear of a phone call from the prosecution, from Rudy Giuliani’s Southern District of New York or from Gary Lynch, head of enforcement for the SEC. One call and you were finished.
Roughly a decade and a half after Boesky’s arrest, Dr. Sam Waksal learned in advance of others that his company’s drug application would be turned down by the FDA, a classic piece of material inside information. Waksal’s move, to buy puts on his own company, would have been viewed as suicidal immediately post-Boesky.
Also a decade and a half post-Boesky, a group of hedge-fund managers concocted a scheme to rig mutual funds to steal from the unknowing little fellas.
A decade and a half later, a gang of white-collar thugs, men like Bernie Ebbers at WorldCom and Dennis Kozlowski at Tyco and Andy Fastow and Jeff Skilling at Enron and the Rigas boys at Adelphia, decided that the securities laws didn’t apply to them.
A decade and a half later, Martha Stewart would get two chances to admit to the Feds she made up a story about a stop-loss order to justify the selling of shares in Waksal’s company before it crashed.
A decade and a half later, CSFB’s Frank Quattrone would think he was untouchable even if he destroyed documents after learning he was a target of a federal securities investigation.
What happened in between these two eras that made it so today’s most powerful people of finance would repeat—and reinvent—the sins of the past?
Some of it was time. The passage of time. People just plain forgot. That’s Waksal and Stewart. Or they were ignorant—that’s Ebbers. Or they were too young—Fastow, Skilling, and the hedge-fund and mutual-fund managers who stole your net-asset values. They were in middle school when Boesky was busted.
Rigas, Kozlowski, Ebbers, and the others who are charged with looting their own companies? There I blame the Feds themselves. Not the Feds circa 1986 but the ones in the nineties, who lost their bearings and neglected to bring timely prosecutions of white-collar crimes. Five years ago, it was revealed that executives at Cendant committed the largest accounting fraud of the era, but the CEO of that company, Walter Forbes, has yet to be prosecuted (though he’s at least been indicted). “Chainsaw Al” Dunlap committed major accounting fraud at Sunbeam and got off with a fine for a fraction of the money he made. Both Forbes and Dunlap were caught up in chicanery every bit as ugly as the crimes we’ve recently seen. But the prosecutors gave them big fat passes that sent a bright green signal to those who were tempted to steal from their companies and the marketplace.
The combination of time and the breathtaking failure of securities regulators to show any toughness at all against white-collar crime created a world in which you could commit crimes and make a pretty good bet that you would get away with them.
So we have to crack down again, just like a decade and a half ago. And I can assure you that once again, it is working: The arrests and the perp walks and the indictments are having the desired effect.
Somewhere, though, in some high school or middle school, another generation is oblivious to the scandals and the crimes. A decade and a half from now, I suspect, we’ll be due for a new tsunami of crime, as these prosecutions fade in memory or fail to get embossed into the brains of those too young to pay attention.