Your bud knew something he shouldn’t have?
Money for the Democrats campaign???
So Quick??? According to the Financial Times:
“The inquiry was made by the SEC’s examination staff, which has oversight of credit rating firms, one person familiar with the matter said. The SEC examination staff has the power to make referrals to the SEC’s enforcement division if it believes any laws have been, but the inquiry might not result in a referral….Proving someone leaked information about the downgrade, or traded ahead of it, could be challenging. Many traders anticipated the downgrade and bets could occur across numerous securities or currencies without inside information. In a traditional insider trading case, there is often a more predictable correlation between a company’s stock price and a particular development.”
An investigation coming so soon after a trading event, usually means that the SEC “Stock Watch” computerized surveillance system has discovered large concentrations of profitable trading activity involving “material non-public” information prior to an event.
It would be naïve to believe that someone did not give a “heads up” to certain Wall Street traders on the timing of an S&P downgrade. But given the brutal losses suffered by average Americans in their 401Ks; we may be facing a Constitutional Crisis if the SEC determines the “heads up” came from the President or his Administration.
Friends in high places doesn’t always help …
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