Speeding Ticket For GLG

I feel compelled to weigh-in on the resolution of the GLG market manipulation charges. As has been known since March 2nd, both GLG and Mr Jabre received speeding tickets (GBP 750,000 fines) from the FSA for alledged trading on material non-public information. As a result of the settlement (provided neither GLG nor Mr Jabre appeal), no further investigation will be conducted nor will there be any public hearings in the affair.

As one might gather from my previous posts, I am rather disappointed by the outcome since the fine (comparable to a speeding ticket in the hedge fund world) de facto sanctions cheating and the cheaters who cheated, and will do nothing to discourage unfair play, or less-than-salubrious secondary market antics.

The FSA, the public, and market integrity are the biggest losers in the decision. FSA chief, Hector Sants came out guns-a-blazing about policing and investigating market abuse and manipulation, but somewhere between then and now, someone apparently stole his manhood and has placed it in a little box, someplace where he was apparently unable to find it. UK regulators now appear more pathetically whipped in relation to their American counterparts, The SEC than Mr Blair's government underneath the jackboot of the Bush administration prior to the Gulf war. Yes, it seems to me that they have squandered their chance to prove that market surveillance in the UK is REAL, that the FSA has teeth (something the SEC, for all the brouhaha surrounding manager registration, has yet to locate with respect to market manipulation), and that the penalties for cheating are embarassing, severe and immutable.

But perhaps the real winner is Goldman Sachs who, as a result of the settlement, will not have to endure on-the-record public inquiries into it's investment banking, underwriting and sales practices, nor elaborate upon how it leverages its network of friends, former employees and good customers to everyone's mutual advantage.