On Wall Street Crime Pays - A 350% IRR To Be Exact
Tyler Durden's picture
Submitted by Tyler Durden on 08/07/2012 19:59 -0400
Enron
Morgan Stanley
Previously we showed that when it comes to Wall Street's returns, the 8% market return benchmark that every first year analyst finds in Ibbotson's is for naive amateurs. With corporate lobbying returning anywhere between 5,900% and 77,500%, the real money is to be made in the buying and selling of politicians. Yet in our day and age, when information propagates rapidly and when political muppets can be exposed for the Wall Street purchased frauds they are, lobbying is getting increasingly more complicated. Which leaves one other high returning "investment", which unlike lobbying is completely riskless when one is a Wall Street firm: crime. But not just any crime, the type of crime where a firm settles "without admitting or denying guilt" and in the process is slapped with a fine that barely covers the government's legal fees. Case in point: U.S. v. Morgan Stanley, U.S. District Court, Southern District of New York Case #11-6875, where MS was punished with the epic disgorgement penalty of $4.8 million. Of course, the fact that Morgan Stanley, who did not admit wrongdoing, generated profits of $21.6 million, is merely a triviality. But a useful one: it allows to calculate that on Wall Street crime does pay, and the IRR is in give or take 350%.
This is what happened:
Morgan Stanley (MS) won approval of a $4.8 million accord with the U.S. over claims it helped manipulate electricity prices, in what the Justice Department called its first effort to get disgorgement from a financial firm that used derivatives to aid anticompetitive behavior.
In accepting the agreement, U.S. District Judge William Pauley in Manhattan turned aside complaints from a not-for- profit organization that Morgan Stanley didn’t admit wrongdoing. Pauley, citing the Justice Department, said the case marks the first time the government filed an antitrust suit against a financial firm involving derivative agreements.
“Disgorgement of $4.8 million is a relatively mild sanction,” Pauley wrote. “But despite this court’s misgivings, the government’s decision to settle for less than full damages is entitled to judicial deference, particularly in view of the novelty of the government’s theory.”
The ever efficient US government did such a
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Racer
Racer's picture
For ZH to look at, ... is there a penis 'thrusting' algo?
on the chart ooks like a couple of balls one rounded and bigger lower than the other smaller rounded one, then ... yeah you get it...
I don't participate in this fake market but am very concerned for my unborn children .....
that they are being raped before they are even born
Realist - Everybody in America is soft, and hates conflict. The cure for this, both in politics and social life, is the same -- hardihood. Give them raw truth.
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