Another One Bites the Dust

No, not blog stalkers -- although this guy probably had the same major.

By committing insider trading (JP definition: Verb. Def. 1: buying/selling stock based on inside knowledge you have that has not been made public yet. Def. 2: very, highly illegal. Def. 3: layman's terms -- getting first crack at it because of an unfair advantage; known examples: Martha Stewart), the CEO of Galleon Group Raj Rajaratnam and several others are being charged in court although they haven't pleaded to the charges yet. article link

These sorts of unethical and illegal things helped propel Rajaratnam to the status of billionaire, with his net worth at 1.3 billion. Happy Raj:


Now, lawyers will be getting a good chunk of that wealth to defend him against the charges that he greedily jumped ahead of ordinary investors trying to do the right thing with the information they have available to them to make wealth for themselves. Sad Raj:


If the gap between CEO pay and regular workers weren't so damned large, perhaps there would not be the incentive to cheat. After all, even the shoddy argument that the CEOs "produce" something that is so much more intrinsically important than those who work for them is completely blown away by the state of the economy that their clever decisions helped to create. CEO pay and bonuses need to be reviewed, in my opinion. The financial industry itself is full of ethical problems it doesn't want to examine. I remember one of my finance profs answering my question about the quality of information really available by looking at things like p/e ratio, etc. His response, "We assume everybody's honest." I lol'd. This was just before the Enron collapse.

There are always things a single investor can do to try to make a difference on the high seas of finance -- an ocean absolutely riddled with pirates. Credit card companies are a good place to start. Currently, some credit card companies are jacking up the annual percentage rates on some customers as high as 30-32% -- for people who have never had a late payment! Additionally, many cards will soon be charging 5% minimum payment instead of 2%, which is more than doubling what you would be paying per month -- some people just aren't going to be able to afford this, especially with the economic conditions going on now. So, why not move your money to a credit union? They offer credit cards, they're easy to get hold of, and they're staffed by people who live in the community. Oh, and they are not the same people who took a government bailout -- your money, remember -- and are set to turn around and pay out bonuses to their employees, all the while telling you they can't possibly give you a break on that 30% APR or that 5% minimum payment.

As for the stock market, there are places like Ethical Investing

that monitor both stocks from companies with ethical behavior and stocks without such companies. You can simply google "ethical investing" and be on your way. Of course, there is the usual caveat to make sure you're really picking an ethical stock, etc. Just because it says it is, doesn't mean it is. And finally, there's always the "make noise" category, for whatever it's worth. For every Raj Rajaratnam there are probably ten more who haven't been caught yet. Or maybe Raj was looked into because some of his donation money went to a Tamil Tiger front posing as a charity. Who knows why they were clued into him. But politicians need to know how angry people still are at the financial inequality in the market right now. It isn't fair that we have no money for health care (regardless of what you think of the plan) but we do have money to bail out businesses that turn around and put the squeeze on already squeezed citizens. They need to know how unfair it is that the average citizen tries to buy stocks on decisions made on the market based on good faith, while people like Rajaratnam and his crew take advantage of what they know to grow even wealthier than they already are. It doesn't always work, but at least it shakes the foundation a little.

-- DV