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Whistleblower exposes insider trading program at JP Morgan

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posted on Mar, 19 2008 @ 10:49 AM
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Whistleblower exposes insider trading program at JP Morgan


__._

Here's how it works:

1. An insider client transfers all or a portion of their company stock into a JP Morgan Securities Inc. brokerage account.

2. The insider then develops, in conjunction with the 10b5-1 team, a 'phased, pre-planned sales program to be executed at either market or

specified prices'.

3. Depending on the information available to the insider (but not the public), the insider can decide whether to execute the sale or not.

By gaming the system this way, JP Morgan teaches insiders how to use their knowledge to create a rigged market, one in which it is the "house" that always wins, and the small investor that always loses.

According to a statistical research paper published by Stanford's Graduate School of Business in September last year, executive 10b5-1 trades beat gains relative to non 10b5-1 executive trades by more than 500%.

One can only guess at how many insiders profited under JP Morgan's "insider trading program," leaving small investors holding the bag.
(visit the link for the full news article)


Related News Links:
gawker.com




posted on Mar, 19 2008 @ 10:49 AM
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This is very interesting news considering they just got help from the fed to buy Bears Stearns at pennies on the dollar. Its feels like there is just too much corruption. Society is literally being tricked over and over.

This document describes "an insider trading loophole big enough to drive a truck through" and "'how-to' programs and even client service divisions to help well-heeled clients circumvent insider trading regulations".

These are not the type of companies we shouldn't be bailing out.

__._
(visit the link for the full news article)

[edit on 19-3-2008 by Beefcake]



posted on Mar, 19 2008 @ 10:57 AM
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reply to post by Beefcake
 


So right, Beef! Star!

The insider trading that has gone on is sure repulsive. I was watching
Meet the Press with Tim Russert, just before 9/11. He was interviewing
Harvey Pitt, (ex head of the Securities and Exchange Commission), and
Harvey was saying that he wanted to "get to the bottom" of trades made
by Bush & Cheney!

Never heard from him again...

[edit on 3/19/2008 by FRIGHTENER]

[edit on 3/19/2008 by FRIGHTENER]



posted on Mar, 19 2008 @ 11:15 AM
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while this does, yet again, show the unfair advantage execs have over the general public, JP Morgan is not doing anything wrong. They've found a loop hole and they're exploiting it for the benefit of their clients. It's why they get paid. No different than a client paying me to find the best possible tax strategy based on the tax laws. If there's a way to beat the system without breaking the law, you beat it.



posted on Mar, 19 2008 @ 11:16 AM
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I wonder how much traction this story will get on the 'main-stream' media?

(sorry, this is an unintentional one-line post


[edit on 19-3-2008 by Maxmars]



posted on Mar, 19 2008 @ 12:07 PM
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Originally posted by Beefcake
Its feels like there is just too much corruption. Society is literally being tricked over and over.


Yeah pretty much. The money game itself is a fraud... we sell our lives and our time for pieces of paper that aren't worth anything in the real global market. Now we're starting to really see that it is worth nothing.

But for people who are in on the game, they will twist rules and pull all sorts of schemes - and they get rewarded by their companies for doing so. The whole game is corrupt so to be a good player they expect you to win for the company any means possible.

Is any of this morally sound? Nope. But if America were morally sound we would have a currency that is backed by something. We are all being cheated.



posted on Mar, 19 2008 @ 12:16 PM
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while this does, yet again, show the unfair advantage execs have over the general public, JP Morgan is not doing anything wrong. They've found a loop hole and they're exploiting it for the benefit of their clients. It's why they get paid. No different than a client paying me to find the best possible tax strategy based on the tax laws. If there's a way to beat the system without breaking the law, you beat it.



indeed, they pay people good money to find these exact loopholes! Realistically there will always be some insider trading going on, because it is hard to police. Share repurchasing can even be considered as a form of trading with inside information, however it is allowed (not in all countries though).



posted on Mar, 19 2008 @ 12:51 PM
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reply to post by Crakeur
 


Yeah but the problem is all of it equals exploitation, bridling the majority while the wealthy minority continue their reign of the financial institution and buy influence over the ruling parties of the world. Slightly different from Joe-average wanting a couple of extra hundred bucks on his tax return I would say.



posted on Mar, 19 2008 @ 01:16 PM
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Originally posted by Shakesbeer
Yeah but the problem is all of it equals exploitation, bridling the majority while the wealthy minority continue their reign of the financial institution and buy influence over the ruling parties of the world. Slightly different from Joe-average wanting a couple of extra hundred bucks on his tax return I would say.


I wasn't comparing the two but pointing out that what JP Morgan is doing is no different than an accountant finding loopholes in the tax code. JP Morgan found a way to help their clients out. If you want to blame anyone for this, blame the SEC. It's their rules. JP Morgan is simply playing by their rules.



posted on Mar, 19 2008 @ 01:18 PM
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It is beautiful tactic that if you want to make a criminal enterprise legit then all you have to do is make the illegalities legal. What, if anything can ever been done about things like these that are legal but shouldn't be. Only type of action is boycotts and there just isn't enough people who care.

Violence is off the table because thats what they want. I guess just create awareness and like vaccines and autism is now mainstream this type of thing will go mainstream.



posted on Mar, 20 2008 @ 12:15 AM
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I think loopholes are not illegal like our Mod says. I don't agree with them, but if placed in the same situation, I'd use them too; it's just good business.

I think the Bear Stearn investors are going to veto this take over by JP Morgan and that's why you're seeing that stock go up. If I had cash I'd be buying that stock, and Citibank. These are two companies that aren't going to fail; and as you've seen, the Fed is helping JP Morgan save them. If indeed we are in a recession, any economist would tell you that the Fed is wrong. The only good that comes from a recession is that the companies that know what they're doing keep keeping on and the ones that don't fail. With this move, the natural order of things are being thrown out of whack.



posted on Mar, 20 2008 @ 07:57 AM
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reply to post by ChrisJr03
 


I can't imagine they'd say no to the take over. If they did, they will be filing for bankruptcy and then the bonuses they doled out in the beginning of the year might be in jeopardy of being returned. They will have a hell of a time trying to get all that money back. The 2 dollar fire sale is the only feasable option, unless someone else comes along with a better offer.



posted on Mar, 20 2008 @ 10:37 AM
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The whole ethos surrounding the finacial industry is Greed, yes this is morally wrong, walking all over the little guys so the fat cats can get even fatter! But thats what the financial industry does, and they will do anything within their legal powers to increase profit for themselves and their shareholders and clients. Indeed sometimes greed plays such a factor that institutions work outside the law and not only around it. No wonder everyone is suspicious of the Bilderbergers they will only ever be a special intrest group which acts to serve the agenda of its members and not the masses.



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