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From: scion5/28/2011 2:29:11 PM
   of 10395
Raging Bull Chat Room Devotees Get Dose of 'Whopper'

By Robert Kowalski
11/09/00 - 03:12 PM EST

If anyone needed further proof that Internet bulletin boards attract fools like winged vermin to a Shell No-Pest Strip, Steve Tracy offered it last week when he publicly "confessed" online that he was being paid to bash stocks.

In the week that followed, lots of the gullible folk still apparently didn't realize just how badly they were being had. So badly that Tracy, the originator of the little hoax, was sheepishly wondering if his prank had spiraled out of control.

"In my view, this thing has gotten totally ridiculous," he wrote in an email interview. "While at first I was pleased at the reception it received, I am quite dismayed that so many people would believe what I had thought to be an obvious joke."

The fun began last Wednesday when Tracy, who goes by the Internet alias firebird_1965, posted a tome entitled, "Confessions of a Paid Basher", on Raging Bull.


Tracy posted the purported mea culpa with considerable fanfare, including a message-by-message countdown to its launch.

In the missive, he came clean in gushing prose about what many of the conspiratorial types have suspected for months about the Internet message boards: He claimed he was being paid to bash stocks as part of an orchestrated effort to drive their prices down. He said he worked for a boiler room operation called Franklin Andrews Kramer & Edelstein in Stamford, Conn.

He said he was ashamed and wanted to be able to look himself in the mirror again. "I'm too broken up to continue. I hope this confession can make up for my sordid deeds," he wrote.

OK, that kind of talk usually brings a skeptical smirk to any reporter's face. This is Raging Bull, after all, not the Little Sisters of the Poor. And there were other red flags fluttering around this tale.

There is no listing for Franklin Andrews in the Stamford phone directory. No sign of it in standard corporate records databases either. One clever observer later noticed a pattern in the first initials of each name in the firm when linked together: F-A-K-E.

"Come on, that's as obvious and silly as those acronyms they used in the old 1960s spy movies," Tracy said.

There was also a nearly identical posting of a so-called paid basher confession on another message board site with a different name for the supposed boiler room. Then there was the clincher. At the bottom of Tracy's "confession," well past the signature (for anyone who bothered to continue scrolling), read this innocuous line: "And if you believe this -- lol."

In Internet posting lingo, "lol" is short for "laughing out loud."


But that's the part no one picked up initially when they electronically copied the confession and began posting it all over other message board sites under headings for at least a dozen different stocks.

Those included boards for Urbana(URBA), Sun Microsystems(SUNW), Cyber-Care(CYBR) and WaveRider Communications(WAVC).

"It put 'bashers' in a whole new light for me" one person wrote in a posting on Raging Bull.

Tracy claims on his Raging Bull profile to be a 35-year old Texas marketing consultant with an MBA who likes "fast cars, faster women." But we know how much to believe about what he says online.

Still, in an email interview, he said: "I would ask that it be made clear ... that I am not a paid basher."

"The truly sad thing is that after learning it was a put on, some of these people still want to believe it was part of some grand conspiracy," he said. "My suggestion to these people is: Don't go to Burger King for a while -- you've already had your share of Whoppers!"

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From: scion5/28/2011 2:44:49 PM
   of 10395
Former executives of Conversion Solutions Holdings Corp. convicted of fraud; CEO flees, faces manhunt

By Jeremiah McWilliams
The Atlanta Journal-Constitution
6:15 p.m. Friday, May 27, 2011

A federal jury in Atlanta convicted two men in what prosecutors called a "pump and dump" scheme to defraud investors in Conversion Solutions Holdings Corp., based in Kennesaw.

The U.S. Attorney's office said Rufus Paul Harris, the company's former chief executive, fled in a dark-colored minivan from a local hotel on Monday before the trial was over. Friday evening he was still the subject of a nationwide manhunt.

After a two-week trial, Harris, originally from Adairsville but more recently from Oklahoma City, and Benjamin Stanley of Kennesaw were convicted on federal charges of securities fraud, wire fraud, and conspiracy. Stanley was present when the verdict was delivered Friday. A third defendant, Darryl Horton of Okemos, Michigan, pled guilty to conspiracy while the jury was deliberating.

Harris and Stanley could receive maximum sentences of 25 years in prison and fines of up to $250,000 for the securities fraud charge, the same penalty for the conspiracy charge, and 20 years in prison and a fine of up to $250,000 for each count of the wire fraud charges. Horton could receive up to five years imprisonment and a fine of up to $250,000. The men will be sentenced Aug. 18.

U.S. Attorney Sally Quillian Yates said the defendants, the three top officers in the company, pumped up the company's stock price with false claims and inflated financial statements while secretly transfering the stock to immediate family members who sold the stock at inflated prices.

Prosecutors said the fraud began in August 2006. In October 2006, the company's annual report claimed as much as $800 million in assets, $500 million of which was supposedly in the form of sovereign bonds from Venezuela and Finland.

CSHC's stock price on the open market more than tripled from less than $1 per share to more than $3 per share from August to October 2006. But prosecutors said the three defendants knew the company had little if any assets of any value.

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To: scion who wrote (2)5/28/2011 2:49:49 PM
From: scion
   of 10395
Three execs guilty in stock fraud case

Atlanta Business Chronicle
Date: Friday, May 27, 2011, 4:38pm EDT

A fugitive executive with a metro Atlanta firm, an accomplice from the area and another from Michigan were found guilty of running a multi-million-dollar stock ‘pump-and-dump’ scheme.

A jury in federal district court returned guilty verdicts against Rufus Paul Harris, 43, now a fugitive, originally from Adairsville, Ga., and Benjamin Stanley, 48, of Kennesaw, Ga.

A third defendant, Darryl Horton, 50, of Okemos, Mich., pleaded guilty to conspiracy while the jury was deliberating the case.

Harris and Stanley were convicted by the jury on federal charges of securities fraud, wire fraud, and conspiracy in connection with a scheme to defraud investors of the publicly traded company Conversion Solutions Holdings Corp., which has Kennesaw as its headquarters.

According to U.S. Attorney Sally Quillian Yates, the charges and other information presented in court: When the criminal activity began in August 2006, Harris was the founder and CEO of CSHC, Stanley was the co-founder and chief operating officer and Horton was the chief financial officer. The evidence showed the three defendants issued false press releases and financial statements about the company to inflate the stock price, while at the same time they were secretly transferring shares to family members who sold at the inflated prices.

The defendants issued a series of press releases publicly claiming CSHC’s ownership of more than $1 billion in foreign bonds issued by the Republics of Venezuela and Finland. These bonds were, on their face, worth billions of dollars and paid tens of millions in annual interest.

In at least one of the press releases, Harris was quoted saying based on CSHC’s acquisition of such large quantities of sovereign debt: “We are looking at a new justifiable reorganization release price of $25.63 [per share].”

At the time, CSHC shares generally traded at less than $1 a share.

In October 2006, CSHC issued an annual report claiming as much as $800 million in assets, $500 million of which was in the form of foreign sovereign bonds as stated in at least some of the press releases.

Also according to this report and its attachments, CSHC's income included $19,869,792 in interest revenue from those bonds.

According to the evidence presented in court, the three defendants knew these public statements were untrue, and knew that CSHC had little if any assets of any value and did not own the foreign sovereign bonds and other assets that it claimed to have. CSHC also had little if any in the way of revenue or profit from any business activity.

During the weeks that the misrepresentations were being publicly disseminated via press releases and SEC filings, CSHC's stock price on the open market more than tripled. The stock, which was a "penny-stock" trading for less than $1 a share on the Over-The-Counter Bulletin Board in August 2006, appreciated to more than $3 a share in October 2006. During this time, Harris, Stanley and Horton transferred substantial quantities of CSHC stock to family members and others, who sold the stock in the open market at artificially inflated prices of between $2 to $3 per share.

On the first day of the trial, Harris waived his right to an attorney, instead electing to represent himself. Harris had been free on a previous bond and was staying at a local hotel. Investigation by the U.S. Postal Inspectors revealed that on May 23, 2011, at approximately 6:20 p.m., Harris checked out of the motel and exited the parking lot in a dark colored minivan. Harris failed to report to court on May 24 and a warrant for his arrest was issued.

The trial proceeded against all three defendants, in Harris’ absence.

Harris and Stanley could receive a maximum sentence of 25 years in prison and a fine of up to $250,000 for the securities fraud charge, 25 years in prison and a fine of up to $250,000 for the conspiracy charge, and 20 years in prison and a fine of up to $250,000 for each count of the wire fraud charges.

The false certification of a financial statement charge, as to Harris, carries a maximum sentence of 10 years in prison and a fine of up to $1 million.

Horton by virtue of his plea will likely receive the maximum sentence of five years imprisonment for the count to which he pleaded guilty, and also faces a fine of up to $250,000.

Sentencing is scheduled for Aug. 18.

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From: scion5/28/2011 2:51:49 PM
   of 10395
Ex-Nasdaq Intelligence Official Ensnared in Insider Trading Case

May 26, 2011
Tom Steinert-Threlkeld

The Securities and Exchange Commission Wednesday alleged that a former managing director of the Nasdaq Stock Market stole and used confidential information while working as a market intelligence gatherer for the electronic exchange.

The federal regulator charged Donald L. Johnson with insider trading, charging that he used the information he stole to achieve personal profits of more than $755,000 over a period of three years. Johnson re-used information about companies that were about to make "market-moving public announcements,'' the SEC said.

The announcements included corporate leadership changes, earnings reports and forecasts, and regulatory approvals of new pharmaceutical products.

Johnson, the SEC said, often placed illegal trades directly from his work computer through an online brokerage account in his wife’s name.

In a plea agreement Thursday in federal court in Alexandria, Johnson admitted to more than half a dozen trades in which he used non-public information to profit, according to Associated Press.

Johnson faces up to 20 years in prison, the AP reported.

“This case is the insider trading version of the fox guarding the henhouse,” said Robert Khuzami, Director of the SEC’s Division of Enforcement. “Instead of protecting Nasdaq client confidences, Johnson secretly traded on client information for personal gain, even using his NASDAQ office computer to make the trades.”

According to the SEC’s complaint filed in U.S. District Court for the Southern District of New York, Johnson illegally traded in advance of nine announcements involving NASDAQ-listed companies from August 2006 to July 2009.

Johnson took advantage of both favorable and unfavorable information that was entrusted to him in confidence by NASDAQ and its listed company clients, shorting stocks on several occasions and establishing long positions in other instances.

Johnson lives in Ashburn, Va., and worked in various positions for the NASD and NASDAQ for 20 years until his retirement from NASDAQ in September 2009.

According to the SEC’s complaint, Johnson worked in NASDAQ’s Corporate Client Group (CCG) from January 2000 to October 2006. He then transferred to the Market Intelligence Desk, a specialized department within the CCG that provides issuers with general market updates, overviews of their company’s sector, and commentary regarding the factors influencing day-to-day trading activity in their stocks.

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From: scion5/28/2011 2:52:52 PM
   of 10395
The Audacity of Chinese Frauds

May 26, 2011

To pull off a fraud that humiliates the cream of the global financial elite, you need to have some friends. And where better to have them than at the local bank?

The fraud at Longtop Financial Technologies, a Chinese financial software company, was exposed this week in an amazing letter from its auditors, Deloitte Touche Tohmatsu. It appears to be a tale of corrupt bankers and their threats to auditors who had learned of the lies.

Deloitte, which had given clean audit opinions to Longtop for six consecutive years, apparently was well on its way to providing a seventh, for the fiscal year that ended March 31. But for some reason — Deloitte did not say why —the auditor went back to Longtop’s banks last week to again seek confirmation of cash balances.

It appears Deloitte sought confirmations from bank headquarters, rather than the local branches that had previously verified that Longtop’s cash really was on deposit. And that set off panic at the software firm.

“Within hours” of beginning the new round of confirmations on May 17, the confirmation process was stopped, Deloitte stated in its letter of resignation, the result of “intervention by the company’s officials including the chief operating officer, the confirmation process was stopped.”

The company told banks that Deloitte was not really the auditor. It seized documents, Deloitte wrote, and made “threats to stop our staff leaving the company premises unless they allowed the company to retain our audit files.”

Despite the company’s efforts, Deloitte learned Longtop did not have the cash it claimed and that there were “significant bank borrowings” not reflected in the company’s books.

A few days later, Deloitte said, Longtop’s chairman, Jia Xiao Gong, told a Deloitte partner that there was “fake cash recorded on the books” because there had been “fake revenue in the past.”

The stock has not traded since that confrontation. The final trade on the New York Stock Exchange was for $18.93, a price that valued the company at $1.1 billion. At its peak in November, it had a market capitalization of $2.4 billion.

It now seems likely that the stock is worthless. It is a real company, but its revenue and profits probably were a small fraction of the amounts reported. The existence of the “significant” debt means that whatever assets are left are likely to be owned by the banks, not the investors.

Deloitte may have decided to check the numbers again because it knew a growing group of bears on the stock had been challenging the Longtop story as too good to be true, questioning both its financial statements and the claims it made for its software. A month earlier, Deloitte resigned as the auditor of another Chinese company, China MediaExpress, in part because of questions about bank confirmations.

It is never good for an auditor to have certified a fraud, but Deloitte seems to have acted properly. It got bank confirmations, and it got them directly from the banks rather than relying on the company to provide them, as PricewaterhouseCoopers had done when it failed to notice a huge fraud at Satyam, an Indian technology company.

But the confirmations were lies.

“This means the Chinese banks were in on the fraud, at least at branch level,” says John Hempton, the chief investment officer of Bronte Capital, an Australian hedge fund. He was one of the bears who questioned Longtop’s claims and now stands to profit from the stock’s collapse.

“This is no longer a story about Longtop, and it is not a story about Deloitte,” he added. “Given the centrality of Chinese banks to the global economy, it’s a story much bigger than Deloitte or Longtop.”

The Securities and Exchange Commission has started an investigation, and no doubt more details will emerge, including the names of the banks involved. Just what, if anything, Chinese officials choose to do could provide an indication about whether defrauding foreign investors is deemed to be a serious crime in China.

Fraud in Chinese stocks is not new. But it had seemed that the worst problems were in small companies without Wall Street pedigrees. Many of the fraudulent companies went public in the United States by the reverse-merger shell route, a course long favored by shady stock promoters. That route allowed companies to start trading without going though a formal underwriting process or having its prospectus reviewed by the S.E.C. And many used tiny audit firms based in the United States that seemingly did little if any work.

What is stunning about Longtop and some other recent disasters is the list of smart people who were fooled.

Longtop did not go public through a reverse merger. Its initial public offering, in 2007, was underwritten by Goldman Sachs and Deutsche Bank. Morgan Stanley was a lead manager in a 2009 offering of more shares. Major owners of the stock included hedge funds run by people known as “tiger cubs” because they got their start at Julian Robertson’s Tiger Fund.

On May 4, only a couple of weeks before the fateful struggle at Longtop offices, an analyst for Morgan Stanley, Carol Wang, wrote:

“Longtop’s stock price has been very volatile in recent days amid fraud allegations that management has denied. Our analysis of margins and cash flow gives us confidence in its accounting methods. We believe market misconceptions provide a good entry point for long-term investors.”

By then, Longtop officials had begun to scramble. According to its last audited balance sheet, cash accounted for more than half of Longtop’s $606 million in assets. Bears were asking why the company needed all that cash and were questioning whether it existed.

In mid-March, just after the fraud at China MediaExpress was exposed, Longtop announced plans to put some of the cash to use by spending up to $50 million to repurchase its own shares. On April 28, the company tried to assure analysts that the fraud claims were bogus. Derek Palaschuk, a Canadian accountant who served as the company’s chief financial officer, wrapped himself in Deloitte’s prestige, saying that those who questioned Longtop were “criticizing the integrity of one of the top accounting firms in the world.”

“For me,” he said, “the most important relations I have other than with my family, my C.E.O., and then the next on the list is Deloitte as our auditor, because their trust and support is extremely important.”

Mr. Palaschuk had an explanation for why the company had not repurchased any shares. It had some very good news that it had not yet released, and “we were advised by our securities counsel that we should not be in the market purchasing our own shares in the event that this would be considered insider trading.”

Longtop is not the only Chinese fraud that caught prominent Americans. Starr International, an investment company run by Hank Greenberg, the former chairman of American International Group, invested $43.5 million in China MediaExpress and had a representative on the company’s board. Starr has filed suit in Delaware against the company and Deloitte.

Goldman Sachs was not the underwriter of ShengdaTech, a Chinese chemical company traded on Nasdaq, but its investment arm, Goldman Sachs Investment Management, had accumulated a 7.6 percent stake in the company before its auditor, KPMG, refused to sign off on the company’s 2010 annual report and then resigned in late April. KPMG cited “serious discrepancies” regarding bank balances and “discrepancies between KPMG’s direct calls to customers and confirmations returned by mail.” Just as at Longtop, it appeared that auditors had been given false confirmation letters.

In each of those three cases — Longtop, China MediaExpress and ShengdaTech — the auditors discovered discrepancies, but only after signing off on financial statements. That was not the case in this year’s other — and perhaps most embarrassing — resignation by a Big Four auditing firm.

In December, KPMG was retained by China Integrated Energy, which claimed to be a leader in the production of biodiesel. Just hiring a Big Four auditor enabled it to raise $24 million from institutional investors in the United States. Three months later, KPMG certified the financials.

Six weeks after that, KPMG repudiated the report and resigned. By then, China Integrated Energy executives had refused to cooperate with a board investigation into claims that the company was a complete fraud.

The Chinese audit firms, while they are affiliated with major international audit networks, have never been inspected by the Public Company Accounting Oversight Board in the United States. The Sarbanes-Oxley Act requires those inspections for accounting firms that audit companies whose securities trade in the United States, but China has refused to allow inspections.

In a speech at a Baruch College conference earlier this month, James R. Doty, chairman of the accounting oversight board, called on the major firms to “improve preventative global quality controls,” but said that actual inspections were needed.

Two weeks ago, Chinese and American officials meeting in Washington said they would try to reach agreement “on the oversight of accounting firms providing audit services for public companies in the two countries, so as to enhance mutual trust.”

Frauds and audit failures can, and do, happen in many countries, including in the United States. But the audacity of these frauds, as well as the efforts to intimidate auditors, stand out. If investors such as Goldman Sachs and Hank Greenberg cannot fend for themselves, something more needs to be done if Chinese companies are to continue to trade in American markets.

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To: scion who wrote (4)5/28/2011 2:53:33 PM
From: scion
   of 10395

Litigation Release No. 21981 / May 26, 2011

Securities and Exchange Commission v. Donald L. Johnson, Defendant, and Dalila Lopez, Relief Defendant, Civil Action No. 11-CV-3618 (VM) (S.D.N.Y.)


The Securities and Exchange Commission filed a civil injunctive action today in the United States District Court for the Southern District of New York charging Donald L. Johnson, a former managing director of The NASDAQ Stock Market, with multiple instances of insider trading.

According to the SEC’s complaint, Johnson held various positions at the NASD and NASDAQ for 20 years, until his retirement from NASDAQ in September 2009. From at least January 2000 to October 2006, Johnson worked in NASDAQ’s Corporate Client Group (CCG). He then transferred to the Market Intelligence Desk, a specialized department within the CCG that provides issuers with general market updates, overviews of their company’s sector, and commentary regarding the factors influencing day-to-day trading activity in their stocks.

The SEC alleges that, through his positions in the CCG and Market Intelligence Desk, Johnson had frequent and significant interactions with senior executives of NASDAQ-listed issuers, including CEOs, CFOs, and investor relations officers at his assigned companies. In those interactions, company executives routinely shared confidential information with Johnson regarding impending public announcements that could affect the price of their stocks. The executives who shared nonpublic information with Johnson did so based on the understanding that it would be kept confidential and that Johnson could not use the information for his personal benefit.

According to the SEC’s complaint, Johnson unlawfully traded in advance of nine announcements of material nonpublic information involving NASDAQ-listed companies from August 2006 to July 2009. Johnson took advantage of both favorable and unfavorable information that was entrusted to him in confidence by NASDAQ and its listed companies, shorting stocks on several occasions and establishing long positions in other instances. The complaint also states that Johnson often placed the trades directly from his work computer through an online brokerage account in his wife’s name. The SEC alleges that Johnson reaped illicit profits in excess of $755,000 from his illegal trading.

The SEC’s complaint charges Johnson with violations of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and seeks permanent injunctive relief, disgorgement of illicit profits with prejudgment interest and a monetary penalty. Johnson’s wife Dalila Lopez is named as a relief defendant in the SEC’s complaint for the purpose of recovering illicit profits in her possession.

Johnson also has been charged in a parallel criminal action announced by the U.S. Department of Justice today.

The SEC acknowledges the assistance of the Fraud Section of the U.S. Justice Department’s Criminal Division and the U.S. Postal Inspection Service. The SEC brought its enforcement action in coordination with these other members of the Financial Fraud Enforcement Task Force. The SEC also acknowledges FINRA and NASDAQ for their assistance in this investigation.

SEC Complaint in this matter

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From: scion5/29/2011 7:08:51 PM
   of 10395
Convicted Fugitive Financier Caught

The Marshals Service finds Rufus Paul Harris in Utah.


U.S. marshals have caught fugitive financier Rufus Paul Harris at a home in Provo, UT, after a national manhunt that lasted five days.

A Marshals Service task force arrested Harris without incident in Utah, Deputy Marshal Jim Joyner said. The booking information from the Washington County Sheriff's Office shows that the arrest came just after 10 p.m. Utah time, minutes after the start of Sunday in Kennesaw.

William Kehl is credited as the arresting officer.

Harris, 43, formerly of Adairsville, is the co-founder and former CEO of Kennesaw-based Conversion Solutions Holdings Corp. He was convicted in U.S. District Court late last week of eight counts of securities fraud, wire fraud, conspiracy and false certification of a financial statement and could be sent to prison for effectively the rest of his life and be fined nearly $3 million when he’s sentenced Aug. 18.

Also being sentenced that day will be Conversion Solutions Holdings’ co-founder and former chief operating officer, Benjamin Stanley, 48, of Kennesaw, who was convicted of securities fraud, wire fraud and conspiracy, and the former chief financial officer, Darryl Horton, 50, of Okemos, MI, who pleaded guilty to conspiracy while the jury was deliberating.

Harris also faces possible bail-jumping charges after he fled a motel Monday evening during the two-week trial and never returned to court.

“I am happy to announce that this defendant was arrested without incident less than a week after he fled,” U.S. Attorney Sally Quillian Yates said in a statement today. “The defendant was able to travel nearly 2,000 miles, but that was not far enough for the talented and hard working deputies of the United States Marshals Service and the other federal and local law enforcement agencies that assisted.”

Joyner said prompt notice that Harris fled helped the interstate investigation, coordinated by Lead Deputy Lorena McCaigue. Marshals Service offices in Oklahoma, where Harris most recently lived, and Utah worked with the Atlanta office to follow Harris’ trail.

Yates said Harris “will now find that his problems have gone from bad to worse.”

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From: scion5/30/2011 9:50:12 AM
   of 10395
The Trouble With E-Mail

May 29, 2011, 5:30 pm

Among Internet users with secrets, including bankers, lawyers, hackers and people who visit porn sites or confide in friends — so that would be all of us — there’s a widespread apprehension that the Web is no longer a safe place to spill them.

You can see that wariness in e-mail, which for years has been considered a spontaneous and freewheeling form, better known for gaffes and rants than anxiety and circumspection. As recently as 2008, Will Schwalbe and David Shipley described e-mailers as inveterate hotheads in their manual “Send.”

“On e-mail, people aren’t quite themselves,” they wrote. “They are angrier, less sympathetic, less aware, more easily wounded, even more gossipy and duplicitous.”

Oh, how times have changed. The idea that e-mail is chiefly a conduit for anger and lies seems almost quaint. After too may careers ruined and personal lives upended by online indiscretions, it should now be crystal clear that there are some things one must never, ever commit to e-mail.

And that’s why some bankers developed “LDL.” “LDL” — which means “let’s discuss live” — is an acronym that surfaced during the S.E.C.’s investigation of Goldman Sachs for its role in the nation’s financial shame spiral. How do the pros use it? Goldman’s Jonathan Egol is the first known master. When a trader named Fabrice Tourre described a mortgage investment in e-mail as “a way to distribute junk that nobody was dumb enough to take first time around,” Egol shot back: “LDL.”

See how that works? Wanna talk about junky mortgages? Let’s get off the %#^ Internet.

It works with other topics, too. Problems at home? LDL. State secrets about Egypt? LDL. How much you paid for your house? LDL.

“LDL” and its equivalents — tonal inversions of the carefree LOLs of e-mail past — are the most succinct ways Internet-users now express the desire to ditch the Web and seek analog pastures. And as much as the banker chat that was revealed in e-mail seems galling, it’s the rare Web-user who’d willingly submit his own e-mail archive to prosecutorial scrutiny. LDL, for those who have the option, is an extremely good idea. Nearly everyone needs some form of communication that’s not searchable, archivable, forwardable, discoverable and permanent. Of course, the longing for more in-person exchange is also part of the broader nostalgia a time before the Internet, when copyright and privacy seemed enforceable, and traditional business models obtained.

These grander sentiments were on theatrical display scale last week at eG8, the Internet-themed prelude to the G8 conference in France. Both conferences, like other jetset global conferences, are the very definition of LDL, existing solely to facilitate actual, physical elbow-rubbing among human beings like Jimmy Wales, Rupert Murdoch and Mark Zuckerberg.

At eG8, McKinsey submitted eye-popping research that showed that Internet-related consumption and expenditure in the G8 nations is now bigger than agriculture or energy. As if freshly aware of this economic monster, scores of high-profile global lawmakers, including Nicolas Sarkozy, the president of France, then spoke of the Internet as wilderness that they intended to colonize with official government overseers.

But it’s not just French rhetoricians, using the language of the 19th century, to whom the Internet of today seems dangerously anarchic. Bloggers and others now chronicle their breaks from the Internet, periods of withdrawal from electronic communication. They also tighten privacy settings; they close Facebook pages. Their e-mails, texts and IMs become more pro forma and less expressive.

It’s been a year since the arrest of Bradley Manning, the army intelligence analyst who yanked thousands of documents off the government’s Secret Internet Protocol Router Network, or SIPRNet. Manning passed those documents on to WikiLeaks using Tor Hidden Services, a secure network that protects users from surveillance and traffic analysis. WikiLeaks started to publish them. And then Manning described his feat in an online chat with a hacker named Adrian Lamo, who turned him in.

To many observers, the lesson of WikiLeaks was not about Turkey or Saudi Arabia or national security. It’s that no one’s online communication — not the government’s Secret Internet Protocol, not Bradley Manning’s hacker chatroom — is secure. WikiLeaks has become a kind of Ruby Ridge for some Web users: an event that crystallized the perception that the Internet is embattled and that spies are everywhere.

Suddenly it seems, as they used to say in Tintin comics, these walls have ears.

I see how this happened, but I can’t help but remember the day I became It was 1993, and I’d clearly lucked into a good address — highly memorable with all those 7s and 3s. (That same year, President Clinton became

With e-mail, my inhibitions about traditional conversation fell away: there was no blushing or lisping or stuttering on e-mail. If traditionalists who disdained typing or excelled at office banter felt left out by electronic communication, millions of other personalities were brought to life by it. In the early 1990s there were some 15 million e-mail accounts worldwide. By the end of 1999 there were 569 million. Today there are more than 3 billion.

E-mail, then, c’est nous. But we can’t say no one warned us. We’ve all seen too many crises, personal and public, not to know that e-mail is not a place for secrets.

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To: scion who wrote (8)5/30/2011 9:50:51 AM
From: scion
   of 10395
LDL: “Let’s Discuss Live”

Posted By Barry Ritholtz On May 24, 2011 @ 7:59 pm In Analysts,Legal,Web/Tech | 14 Comments

“LDL” is my new favorite acronym.

Call it Wall Street prosecution arcana: To avoid putting into email any damaging info — especially about insider trading — some of the recent expert networks thought they might avoid prosecutions by using the acronym “LDL.” It is strewn throughout their emails, and informs the reciever that they are getting close to sensitive information that should best be discussed without a paper trail. Hence, LDL — “Let’s Discuss Live.”

It is the Wall Street equivalent of the teenage POS — “Parents Over Shoulder” — only in this case, it was more accurate to say “Prosecutors Over Shoulder” !

Dealbook [1] used this example on April 28, 2010:
[ ]

“Even at a disadvantage, not all clients were easy to convince. Goldman e-mails show how the bank backed up its sales team as they sought to unload bets they thought might one day go sour.

In one exchange, a Goldman employee refers to a mortgage investment as “as a way to distribute junk that nobody was dumb enough to take first time around.” The response of Jonathon Egol, a colleague of Mr. Tourre’s who designed some of the mortgage trades, was “LDL,” or “let’s discuss live,” effectively moving the discussion off record.”

How is it possible that in 2010, otherwise intelligent people still fail to understand that they are creating a permanent email trail? Did they actually think no one would know what that meant? The next time I hear anyone say “Goldman Sachs is the smartest shop on the street,” in my mind I will be hearing “He’s the smartest kid on the short bus.”

All I can say is thank goodness for stupidity. It makes prosecution so much easier!

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To: scion who wrote (7)5/30/2011 9:53:35 AM
From: scion
   of 10395
Fugitive businessman caught in Utah

By Erin Alberty
The Salt Lake Tribune
First published May 29 2011 02:43PM
Updated 6 hours ago

A business executive who fled Atlanta while on trial in a high-profile securities fraud case was arrested Saturday night in southern Utah.

The eight-day, nationwide manhunt for Rufus Paul Harris ended after federal agents learned he was staying with the family of a former business associate in Bloomington Hills, near St. George.

"The business associate was out of town at the time," said Michael Wingert, spokesman for the U.S. Marshals. "The family members didn’t know anything about [the criminal case], so he showed up and they just let him stay there."

Marshals found Harris hiding in a utility closet, Wingert said.


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