A comprehensive new study, published by the National Bureau of Economic Research and using a database of 166,000 news releases over a 17-year period, documents the fact that many CEOs manipulate the release of good news to boost their company's stock prices right at the time that their own stock options vest, giving a nice little goose to their own considerable incomes at the expense of the shareholders. Consider it a twist on the old insider-trading scam.
Also, a newly released bipartisan report by a Senate investigative committee documents how JPMorgan Chase illegally manipulated energy markets in California, ripping off ratepayers to the tune of billions of dollars. The scam began when an employee of Southern California Edison sent a resume to JPMorgan Chase, bragging that he had found a weakness in the system that could be exploited for immense profits.
Upon seeing the resume, the head of investing for the JPMorgan Commodities Group fired off an immediate email: “Please get him in ASAP.” The man was hired, and within three months, those profits were rolling in, with one trader so giddy about the easy money that he emailed his colleagues a picture out of "Oliver Twist," captions "please, sir, may I have some more?"**
But don't get caught selling loosies on the streets of New York.
Remember the case of Steve Jobs and other Silicon Valley executives illegally conspiring to drive down the salaries of the engineers who created their products through collusion and intimidation?****
It now appears that an even more extensive cartel has been operating in the computer animation business, with HR executives from companies such as Disney, DreamWorks, Sony and Pixar meeting regularly to set wages for their employees and establish ironclad agreements not to offer wages that exceeded the scale.
But hey, don't get caught selling loosies on the streets of New York. Bad things could happen, and you will deserve it.
----------------
** JPMorgan Chase agreed to pay a $410 million fine, but without having to admit guilt. Nobody has been charged in the case.
**** The companies involved in the Silicon Valley wage-fixing scam have negotiated a $325 million settlement in the case, although a federal judge has rejected that settlement as insufficient given the scale of the scam and the overwhelmingly evidence in favor of plaintiffs. No criminal charges have been filed.
About the Author
