Wall Street's Galleon Case: A New Ending for the Movie Casablanca?

December 23, 2009

The Street Sweeper by Bill Singer

By Bill Singer, Attorney and publisher of http://BrokeAndBroker.com and http://RRBDLaw.com

BILL SINGER: [A]t the end of my Bloomberg interview, Schatzker and Colarusso raised the provocative questions (which I paraphrase): Is the corruption on Wall Street so pervasive that this is what now passes for business as usual? Is the lowly public investor's only option to just live with it?

For veteran lawyers of my generation, "Wall Street" meant broker-dealers, mutual funds, hedge funds, and investment banking. However, Galleon is troubling not simply because of the allegations of extensive insider trading at hedge funds, but because it involves tips from insiders of public companies--the fodder of Wall Street but not necessarily part of the biz.

Sure, the old-guard Wall Street was filled with fraudsters, scamsters, fast-talking con artists and a whole host of unsavory stock jockeys. However, we never really applied such pejorative labels to what was once reverentially called Corporate America, the Fortune 500, the Blue Chips. Whether wishful thinking or fantasy, America's public companies and those who ran them escaped the full wrath that befell Wall Street--but, my, how times have changed. If one believes the allegations in Galleon, there is little difference between boiler-rooms and highly capitalized international hedge funds, between penny stocks and the elite publicly traded shares. Everyone is swimming in the same cesspool. . .

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