BarroMetrics Views; The Rule of Law

Two items in HK’s SCMP (the equivalent of the WSJ  (US) or Sydney Morning Herald).

The first quoted Bloomberg’s ‘Breaching the Public Trust’.  To quote:

“Laws that were set up to punish bad guys got waived within days of announcemnts that offenders had been brought down” It went on to quote the SEC complaint against a May 4 SEC release against UBS. “Our complaint against UBS reads like a ‘how to’ primer for bid-rigging and securities fraud”. So did UBS suffer the consequences?

Hardly, following a request from UBS attorney’s on May 9,  the SEC waived UBS from a being prevented from taking part in securities offerings that are exempt from from registration requirements.

The second piece relates to another piece quote from Bloomberg (’..Said To Be Bank in U.S. Writ):  the piece reported that the IRS has filed an indictment against three Swiss bankers for conspiring to hide more than US$1.2B from it.

All I can say is amazing.

In this latter case, the bank in question does not appear to have offices in the US; so, the US has no jurisdiction against the bank officers (unless they happen to be residing in the US. I could not ascertain if this is the case).

Think of it this way,  if China passed a law that said it was illegal to own a red shirt. Can you imagine how the US would howl if China then laid charges against a US citizen residing in the US because he assisted a Chinese citizen to own a red shirt!??

So on the one hand, the US is seeking to enforce laws over those it has no jurisdiction; and on the other,  in some case, its laws of the land are being flouted with the consent of the regulatory authorities.

What has this to do with trading? On the face of it very little…..but if you are a client of MF Global…won’t the question be  will any criminal charges be brought against the party/parties  who apparently stole segregated funds for his/their own use?

(answer: apparently not see http://www.fiercefinance.com/story/mf-global-likely-avoid-criminal-charges/2012-01-03)

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