6 rogues x 10 years = $1.8 billion

In the compliance vein. But a governance question.

So SAC had at least six employees engaged in insider trading for more than ten years, and the firm pleads guilty to a crime.  Judge pondering whether to accept.

Why aren’t the directors being charged?  Either they didn’t have a reasonable system in place to detect this ongoing activity, or they ignored what reports they got, it seems.  Why isn’t the corporate charter being revoked and the assets forfeited? If ever there were a case that calls out for the corporate death penalty, this is it.

I guess the rule can be stated as “The shareholders pay.”

From an information perspective, there are three points I want to make.  First, the insider information itself has huge value.  Second, the entire idea of corporate governance and the Federal Sentencing Guidelines is that you punish people for acts that are not those of a single rogue employee. Third, what impact does the information on this plea have on the culture at SAC and elsewhere?

“SAC Pact Will Have to Wait,” Wall Street Journal, November 9, 2013 B2 http://on.wsj.com/HNSvYs

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Filed under Business Case, Compliance, Controls, Culture, Definition, Governance, Information, Internal controls, Legal, Policy, Protect assets, Risk, Value

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