Category Archives: hedge funds

#FreeJersey: A Small Island Fights For Its Democracy

The Jewel Of The Channel Islands

Almost everyone has heard of New Jersey, but few people have heard of “old” Jersey — the 5-by-9-mile island just off the coast of France that belongs to the British Crown and is best known for its wonderful Jersey cream, cows and potatoes.

What it is less known for: Jersey stows more tax-shelter money than any other offshore financial center on the planet.  (That’s right, more than the Cayman Islands, Bermuda, Guernsey, the Isle of Man, the British Virgin Islands, you name it.) In fact, name any global bank or quote-unquote paragon of finance and it will almost certainly have some kind of presence here.

For hundreds of years, Jersey was torn asunder by the territorial pissings of England and France — an accident of geography, really, since the island lies in the English Channel between the two countries. As a result, its roads all have very long, ornate French names, but the people of the island speak the Queen’s English.

Another result: the island has an institutional memory of war, not excluding its status as a major base for Germany in WWII (which regarded Jersey as a great jumping-off point for the final showdown it was planning with Britain). Because of this, Jersey has learned to be extremely wary of outsiders.

Jersey: Tiny, But Complicated

Jersey is a self-governing, parliamentary democracy under a constitutional monarchy with its own financial, legal and judicial systems. Its currency is pegged to the British pound, but it prints its own money, votes for its own senators and makes its own laws. Indeed, Jersey has an extremely polished external image that has earned it a very high ranking among the world’s tax havens, but internally its democracy appears to be foundering.

As someone who fell in love with Jersey when I was living in the UK, I have friends on the island and found myself looking into the problems there. A flashpoint in my research was the scandal surrouding an orphanage called Haut de la Garenne, where unspeakable violence, abuse and possible murder took place against children for decades — and yet the government did not stop it. An investigation finally undertaken in 2008 was shut down and the chief of police was suspended — twice — which seemed gratuitous. Those who stood accused largely went untried, but when the island’s health minister objected to this — and would not stop objecting — he was jailed. Also twice. Some of those who were labeled “priority suspects” by the island’s police are now working in high-level government positions in health and education where they continue to have indefensible access to children.

Jersey’s Campaign

Exactly one year ago today, I was banned from the UK as a result of my research into these events. I have continued my work from the U.S. and have had many outstanding supporters in the UK who have kept me going. Among them are Deputy Trevor Pitman, a member of Jersey’s Parliament, who put up a petition today in support of my return. If you believe in the power of the press and the right of even a very small, insular island to stand up for its democracy, please sign this petition (ten seconds) and spread the word. My ability to do my job in this case depends on it.

Today, my travel ban will expire due to the efforts of UK Member of Parliament John Hemming. But I will not be able to work safely until my UK visa is restored. Hence, the reason for Deputy Pitman’s petition (which, if you haven’t signed it yet, again, here it is: http://chn.ge/QCp7qy).

In addition, a group of Jersey citizens — including bloggers, current and former elected officials and concerned residents of the island — have issued a statement of solidarity this afternoon. It is their hope that by joining forces online, where they can best reach the international community for help and support, they can make a stand in defense of their island’s democracy. Featured on the Web site of Neil McMurray, one of the lead bloggers, I have posted their statement here:

Jersey’s Citizen Solidarity

Today is not a day to focus on right-wing versus left-wing politics, but the difference between right and wrong.

When a democratic government abuses its substantial legal, legislative and financial powers to crack down on journalists’ freedom of speech, force policemen and elected officials from their jobs and systemically dismantle its own checks and balances so as to deny each of its targets due process, clearly it is a government that has lost its way.

Jersey, the jewel in the crown of the Channel Islands, may be one of the world’s leading offshore financial centres, but it has begun to use its clout against its own people –and it is keeping the rest of its population in the dark about it. This is now a place where court and legislative records – those that are public anyway – can now be redacted. This is an island where secret trials are now allegedly taking place and elected officials are forced to debate key issues in secret. Web content is banned and journalists booted out. This is not the way a democratic government is supposed to be run.

Again, this is not about politics. It is about standing up for truth, honesty and integrity. It is about restoring the good name of our beautiful island whose reputation has been dragged through the mud by those attempting to cover-up the facts surrounding some of the most heinous crimes known to man – crimes of violence against children. Crimes the vast majority of islanders would never defend, yet most of those who stand accused of committing them have not been brought to justice and continue to walk among us and our children. Worse, these alleged perpetrators remain entrenched in some of the very highest echelons of Jersey’s government –working in departments that focus on children. It is beyond comprehensible.

On an island where children in need of care have been let down by the government for decades – and continue to be let down – we cannot afford to ignore or repeat our mistakes. More broadly, challenging the government’s current decisions, particularly when not made in the best interest of the public, should not require bottomless financial resources and friends in high places. We are supposed to be a democracy, right?

With our checks and balances hamstrung, the international and independent media may be our last chance at reclaiming our democracy and re-establishing rule of law.

Today, Jersey politician Deputy Trevor Pitman launched an e-petition on Change.org in support of the return of U.S. investigative journalist and author, Leah McGrath Goodman, to the island to continue her research into decades of child abuse at Jersey’s state-run “care”homes and allegations of cover-ups in the wake of the government’s removal of the chief of police and shut-down of the investigation.

One year ago today, Ms. Goodman was banned from the UK and Jersey for two years after revealing to the Jersey Customs and Immigration Service during a voluntary meeting that she was writing a book on atrocities against children at Haut de la Garenne. According to the UK Border Force, she was flagged by Jersey Immigration authorities for removal upon her next border crossing – and that is exactly what happened. After the intervention of UK Member of Parliament John Hemming, the ban was reduced to one year and it expires today, 11 September 2012. That said, the UK and Jersey have so far declined to restore Ms. Goodman’s visa or allow her cross the border to continue her research. In order to do so safely, she will need to have her Tier -1 visa status fully restored – hence, the reason for Deputy Pitman’s e-petition.

Leah McGrath Goodman should be permitted to complete her work in order that there is an accurate record based on the available facts and evidence. Jersey needs to confront the failings of its past so it can redress them and, most of all, ensure the safety of our children’s future.

We ask readers who care about the island’s children, who care about the island’s reputation, who believe in a free press and who want the truth to be told to sign Deputy Pitman’s e-petition. We also ask fellow bloggers to copy and paste this blog onto their own Web sites so that we may show the world that Jersey wants the best for its future and its children. It is time to leave our island’s culture of secrecy behind and demand the kind of free and open society our island deserves. Those who would do otherwise are not representative of the majority of islanders.

Please spread the word and sign this petition. The Internet is the one thing Jersey authorities have not been able to lock down. For those who tweet this campaign, please use the #FreeJersey hashtag.

While Jersey may try to keep journalists out, it cannot keep us for letting the truth in.

 

How To Make Someone Else Swallow Your Losses, The Mastercourse

It’s official: when a Wall Street powerhouse suddenly collapses and (possibly) more than a billion dollars goes missing, it’s no longer just the ordinary taxpayer’s problem. Now, it has moved up the chain. Below, the piece I wrote today for Fortune on what traders do when you misappropriate their money.

While Occupy Wall Street was holding its two-month anniversary rally in Manhattan last week, traders were quietly mounting a rather more sophisticated version of OWS on their own. Call it Occupy Wall Street Bankruptcy Court.

FORTUNE — Big institutional investors are getting a taste of what many frustrated taxpayers experienced during the financial crisis: Being on the hook for losses of a major financial firm against their wishes.

This time, of course, it’s MF Global at the center of the dispute. A once-trusted brokerage with roots dating back to the 1700s, MF Global is now a bankrupt firm suspected of misappropriating customer funds to the tune of at least $600 million.

More than two weeks after MF Global’s Halloween bankruptcy filing, there are more questions than answers and a surfeit of conflicts in an investigation that should be aiming to restore the public’s confidence, but is doing the opposite. On Monday, the bankruptcy trustee for the case announced that there may be much more than $600 million missing from MF Global accounts — perhaps as much as $1.2 billion.

Hundreds of millions of dollars of trading capital and collateral were frozen without notice, dramatically disrupting the derivatives marketplace and ushering in a phalanx of federal prosecutors, regulatory agencies and forensic accountants working around the clock to determine where the missing money is. This, after a lawyer for MF Global assured a New York judge earlier this month “there is no shortfall.”

What’s different about this case?  One hedge fund executive summed it up best: “What is scary about MF Global is that there is no political will in this country to look out for people. Let this be a lesson that, if someone tries to steal from you, there is no one who is going to save you. I mean it is literally the most frightening thing that can happen in finance.”

Led by a sense of outrage — as well as the conviction that if they don’t look out for themselves, no one else will — investors have been pooling information and banding together to defend themselves for weeks. Continue reading How To Make Someone Else Swallow Your Losses, The Mastercourse

Trader Threatens To ‘Kill’ 47 U.S. Officials

‘I was being sued…it upset me.’

A midlife crisis can take many forms. Cheating on your spouse. Purchasing a Maserati. Wearing Billabong. Buying into The Lynx Effect. Just being a jerk. But putting up an “execution” list on your Web site of high-ranking financial and government officials and urging people to buy guns to help you kill them is one I haven’t heard of. Among those on the hit list of the smiling man in the orange tie to your left: the head of the Securities and Exchange Commission Mary Schapiro and the chairman of the Commodity Futures Trading Commission Gary Gensler — both heavyweight Wall Street watchdogs.

“Go buy a gun, and let’s get to work in taking back our country from these criminals,” he wrote on his site, according to prosecutors. “I will be the first one to lead by example.”

The 50-year-old from Long Island is accused of threatening the lives of 47 current and former officials. (Yes, I said 47. You cannot make this stuff up.) Continue reading Trader Threatens To ‘Kill’ 47 U.S. Officials

Good News About Unmitigated Awfulness

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So there’s this small issue of the world being debt-ridden and nobody hiring and the delicate financial machinery of our country breaking down in a way that can only be called utterly embarrassing.

This is not altogether bad news. For those who have long been looking for their moment to escape a lifetime of professional drudgery, it is a chance to hit the reset button. Go back to university, take a master class in sculpture or become a Cordon Bleu chef. Our favorite course of late is this one.

Go to the desert and paint your masterpiece knowing you will be unmolested.

The great thing about no opportunity is this: if you remove yourself from the world to do what you want to do, as opposed to doing the fake thing you’re pretending to want to do, it comes with no opportunity cost. You will not be missing out on all the good jobs. There are no good jobs!

The best part is, after taking a year or two out to reposition yourself, the odds are you’ll be returning to a world of renewed opportunity. Maybe not of the milk-and-honey variety, but certainly superior to what you see today.

How can we presume this? Continue reading Good News About Unmitigated Awfulness

Cash or Credit: A Stuffing Under the Mattress Vs. A Hiding in the Closet

It took longer than usual to take up the pen today. Probably because it was imperative to check out the “Every Single Outfit Catherine Wore on the Royal Tour” feature in the Huffington Post.

Having done that, I now turn to more important matters.

Like this cash-or-credit debate taking place in the papers. Financial vigilantes are urging consumers to cut up their credit cards and throw them away. One article in SmartMoney actually sounded the shibboleth: “I’m going all cash!”

To which readers had a range of emotional responses. Two encapsulating these:

“This is simply an irritating article. I am willing to bet $1000 that the author
is lying and in fact is still using his credit cards and not wandering around
paying for everything with cash. If you’re going to write an article, at least
please be intellectually honest. Do you think we are that stupid?’

And:

“Already living this dream. In fact it is a great reality to know that you owe nothing to anyone. We do not have credit cards either, we have covered that with an emergency fund. We own a house (no mortgage) and we have paid cash for all of our vehicles (no financing). As far as I’m concerned, living within your means and being debt free is the NEW AMERICAN DREAM.”

The most compelling reason for getting rid of your credit cards is obvious: ordinary folk have to pay 14% interest on average for them. Yet banks pay less than 1% whenever they feel like borrowing from the government (yes, that includes JPMorgan Chase, Bank of America — even Goldman Sachs and Morgan Stanley, which received “bank holding company” status during the credit crisis).

Kind of annoying that the Big Banks get to play with money for almost nothing, but not us Little People, isn’t it? Continue reading Cash or Credit: A Stuffing Under the Mattress Vs. A Hiding in the Closet

Interview on ‘Keiser Report’ – Russia Today

Many of you have written to ask for a good bit more on the shenanigans prevalent in today’s oil market. Check out this show, aired today, from minute 14 on…(Thankfully, you can scroll through to the juicy stuff.) More to come on DOJ, FTC, CFTC and FERC investigations into the price of oil and gas — and where the biggest challenges lie for those who seek to break the back of the corruption.