Thursday, March 18, 2010

Senator Dodd's Chief Counsel Possibly Traded on Inside Information

From Bloomberg News: 

"Senate Banking Committee Chairman Christopher Dodd’s chief counsel in 2008 traded stock in Morgan Stanley, Wells Fargo & Co., American International Group Inc. and other rescued companies as the panel considered legislation to address the credit crisis, according to her financial disclosure form filed with the Senate." (LINK).

Someone please explain to me how Amy Friend, Dodd's chief legal counsel, would not have had access to non-public information that inspired her to buy these stocks.  Anyone who believes that these are clean transactions is also the type who is expecting a visit from the Easter Bunny next month.

To be sure, under the strict letter of the law, and with some fancy legal maneuvering from the type of legal counsel that got O.J. off the hook, I'm sure if this were to be put under extreme legal scrutiny and investigation, there would be, minimally, ethics violations in the extreme, and most likely evidence of transacting on insider information.  At the very least, anyone associated with Dodd's activities as Chair-thief of the Senate Banking Committee should be prohibited in trading financial securities of any kind.

No doubt this will pass by with not even a censure from Congress.  In fact, just like Goldman partner, Steve Friedman, who made millions loading up on Goldman stock while he was on the board of directors of the NY Fed - just before the NY Fed bailed out Goldman - I'm sure this egregiously unethical, corrupt activity will get lost in the sands of time.

Back in 2002, a colleague of mine and I opined that, as the financial/housing bubbles popped and the real damage starting collapsing our system, we would see fraud and corruption emerge that would blow our minds.  Every day I wake up to new revelations, that of course go unpunished, that blow my mind.  I hope someone in Congress takes up this cause, but I'm not expecting anything to happen.


  1. The rule of law, especially where this realm of our system is concerned, has completely broken down. The evidence for this occurs on almost a daily basis.


  2. Nothing will be done about it, another thing that angers me is that the gov't regulators got bonuses yet the biggest ponzi scheme happened under their watch. Seems like everyone is getting bonuses in finance related world...

  3. Harvey, the case could be made that the bonuses function as a, sort of, hush money payment. It's like in Rome when the Emperor paid his military huge salaries in gold/silver coins - albeit salted coins - but the military personnel had a much higher standard of living than the hoi polloi.