Law Humor

The ?story? that the SEC is promoting i.e. cause of the May ?flash crash? is not just misleading, but completely disingenuous. I know that your's is a political appointment and that your positions necessarily need to drift back and forth with the wind, but as your friend, trust me when I tell you that the flash crash report is full of frivolity.

As a former NASDAQ Chairman, I can only respectfully suggest that the real cause of the May 2010 market mayhem is attributed to the fact that the SEC has never had a clue in the course of their permitting a multitude of disconnected ?virtual exchanges.? It took me years to explain the benefits of electronic markets, but everyone completely overlooked my warnings.

Not only has SEC proven itself to be beholden to the powerful Wall Street firms that have underwritten these systems, but they have demonstrated zero intellectual capacity when it comes to understanding and anticipating the impact fragmented markets cause to our financial market structure, no less the capital structure of our entire financial system.

The flash crash was not a result of my son Andy's fat finger triggering an avalanche of automated sell orders, nor was it a result of Waddell & Reed executing a program order. 

The flash crash was simply a function of a two-decade regulatory environment that shifted the maintenance of fair and orderly markets from immediately-identifiable and accountable specialists to virtual, cyberspace-situated, momentum-trading market-makers in avatar costumes. This is the group that over recent years, has gained full control of the financial markets, and they simply decided to unplug their computers when it became obvious that it would be safer to sit back and pick their noses, as opposed to hoping their computerized trading programs could pick intra-day bottoms or otherwise execute ?arbitrage? strategies.

Most sell-side professionals that have been in the business for more than 15 minutes would agree with the above. 

Further still, as illustrated by statements made yesterday by the Chairman of InteractiveBrokers, one of the largest market-making firms on Wall Street, it just doesn?t make sense to attempt to provide liquidity to a financial system that provides no leash for those that attempt to game or exploit the same system. 

To: Dick Ketchum

From: Bernie

Since you took over my job as NASDAQ Chairman, and now sit on the Board at FINRA, trust me when I tell you that your latest decision to hide internal FINRA memos from your constituents is a bad idea. Look at where that type of thinking has gotten me!

BLM

To: Brad Friedman

From: Mel W.

Don't let yourself be upset by  Judge Crotty's decision. Not only does AIG have plenty of juice, but as a former mentor to the firm, I'd have told you that since your clients actually profited from their investment with Bernie, your clients were at risk of perpetrating insurance fraud by claiming the Madoff-related "loss" under their homeowner policy.

The good news is that you've now gotten a taste of what its like to be in the trenches, and if you're ready to return to the front, I've got a whopper of a Madoff class action that has better than an 80% chance of prevailing. 

Go back and research the net money in vs. net money out definitions; according to Irv P's people, at least 200 brokerage account owners have been denied their claims because Picard's people have convinced the lower court judge that transfers from one account to another constituted a "withdrawal,"  despite the fact that no money ever left their BMIS account. As a result of this absurd position, claimants that took out less than they actually deposited are being denied the return of principal money.

I'm guessing there's at least $10 million on the table in this one, not to mention the potential for treble damages re: bad faith claim handling.  If your office isn't up to it, I'll have to designate that guy Pete to be the lead on this action.

MW