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Global Credit Crunch Conspiracy Theories

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                                                                                    AL
                                                    Index


                                                                              RI
                                                                       TE
                                                                MA
                                                    ED

              ACLN Limited, 118, 119, 173                         Antar, Sam E., 240, 241, 242, 243, 244, 245,
                Eyeshade Report, 88, 89n, 313                          246, 313
                SEC investigation of, 86–113                      Anti-naked shorting cult, 168
                                             HT


              Acme Capital Management (pseud.), 300–301           Antisocialmedia.net (ASM), 231, 232
              Actuaries, San Diego pension system and, 123,       AremisSoft Corporation, 179
                   124, 125, 126                                    SEC investigation of, 54–86, 118, 119, 222
                                      IG




              Adelphia, 77, 121                                   Arnauts, Rudi, 87, 88, 101
              Adjustable rate mortgages, Fed’s money policies     Arthur Andersen, 132
                   and, 275                                       Asset-backed products, 13
                              R




              Age discrimination, 202–203                         Asset bubbles, Federal Reserve Board and, 283
              Aguirre, Gary, 202, 203, 204, 205, 206, 207,
                           PY




                   208, 210, 211                                  Bagley, Judd, 231, 232, 245
              Aguirre, Michael, 137, 138, 139, 140, 141, 142,     Bailey, Matthew, 169
                   143, 144, 146, 147, 149, 150, 202              Bank of America, 147n, 281
                   CO




              AIG. See American International Group, Inc.         Bank of America Securities, 262, 263
              Allied Capital, 312                                 Barclay’s Bank, 286
              Alpert, Bill, 167                                   Barron’s, 170, 174
              Ambec, 270                                          Barton, Joe, 22, 23, 24, 25, 28, 32
              American Capital Strategies, 291, 295               Barton, Tom, 22, 23, 24, 25, 28, 174
              American dream, 273–274, 308, 309                   Bastiaens, Gaston, 35, 41, 45, 48, 215
              American International Group, Inc., 254, 270,       BDO International, 110
                   278, 281, 283                                  Bear conspiracies, 312
              American Lawyer, 271                                Bear raids, detecting, 167–168
              AMEX, 168                                           Bear Stearns, bailout of, 279–280, 281, 283, 286
              Anifantis, Demetrios, 185, 186, 187, 188, 196,      Berenson, Alex, 57
                   201, 219, 220, 221, 222, 223, 226              Bernanke, Ben, 281n, 292, 294




                                                                317
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           318                                           INDEX


           Biovail Corporation, 192, 193, 199, 200, 201,           San Diego pension system and bull market
                219, 227, 271                                         during second term of, 125–126
           Bisschops, Joseph, 87, 90, 92, 94, 95, 100, 101,        short-sellers and “great extinction” during,
                102, 103, 104, 107, 111, 119                          32
           Black, Leon, 174                                      CMOs. See Collateralized mortgage obligations
           Black Monday (1987), 9–12                             CNBC, 172, 207, 238
           Blind-pig theorem, 300                                Cohan, William, 279
           Blogs, 313                                            Cohodes, Emily, 216
           Bloomberg, 239, 258, 287                              Cohodes, Leslie, 215, 216
           Blum, Steven, 97                                      Cohodes, Marc, 32, 33, 34, 53, 54, 163, 178,
           BNP Paribas Luxembourg, 93, 99, 100, 111                   215, 216, 228
           Body, Roddy, 169                                        “first mover advantage” concept of, 226
           Boesky, Ivan, 14, 15, 16, 234, 235                      Lernout & Hauspie case and, 35–39, 44, 45
           Boiller, Edwin, 237                                     new hires at Copper River and, 213, 214, 215
           Bormans, Anny, 97, 103, 104, 119                        O’Brien’s denunciation of, 166–167
           Boyd, Roddy, 227, 255, 261                              Overstock.com case and, 160, 180, 183, 186
           “Bozo journalism,” 232                                  SEC anti-shorting rule, Goldman Sachs,
           Brown, Dan, 234                                            Copper River collapse and, 297, 299, 300,
           Brown Brothers Harriman & Company, 64, 65,                 301, 303, 305, 306, 307
                66                                               Cohodes, Max, 35, 216
           Bucket shop drives, 293                               Collateralized mortgage obligations, 163, 310
           Buffet, Warren, 157, 163, 251                         Columbia Journalism Review, 193, 233
           Bush, George W., 4                                    Comparator Systems, 29, 30, 31
           Bush administration:                                  Congress, home ownership and, 274, 275
             Fed’s monetary policies and, 283                    Conseco, 52, 252
             Paulson Plan and, 293                               Conspiracy theories, 231n, 232
           Business Week, ix, 161                                Contogouris, Spyro, 256, 257, 258, 259, 260,
           Byrne, Jack, 157                                           261, 269, 271, 272
           Byrne, Patrick, 169, 177, 200, 206, 207, 264,         Contrarians, 312, 313
                292, 300                                         Convertible arbitrage market, short sales and,
             Gradient’s analysis of Overstock.com and,                290
                157–162, 178–191, 194–197, 218–228               Cooley, John, 237
             O’Brien and patronage of, 162, 166, 171–175         Copper River Management, x, xii, 238, 261,
             Overstock.com flame wars and, 229–234                     271, 272, 280, 286, 289, 291, 295, 308
                                                                   closing of, 305–306, 307
           California Constitution, 127, 145                       name change from Rocker Partners to, 213
           California Supreme Court, 148                           office quarters described, 215
           Campaign contributions, 308                             SEC anti-shorting rule, Goldman Sachs and,
           Caporicci & Larson, 128, 129, 132                          296–306
           Carter administration, hyperinflation during, 124      Corridor funding, San Diego pension system
           Caruthers, Jim, 89, 91, 173                                and, 125
           CFA Institute, 221                                    Countrywide, 278
           Chancellor, Edward, 181                               Cox, Christopher, 190, 191, 288, 289, 292, 294,
           Chanos, Jim, 256, 289                                      307
           Cheap money, housing bubble and, 275–276              Cramer, Jim, 190, 238, 293
           Chinese walls, at Goldman Sachs, 300, 301             Crawford, Broderick, 168
           Citigroup, 294                                        Crazy Eddie, Inc., 240, 241, 243
           Citizen journalists, 232                              Credit crisis, 310
           Clinton, Bill, 283                                    Credit default swaps, 13, 277–278, 279, 281, 309
           Clinton administration:                                 fear factor and, 282
             Fed’s monetary policies and, 283                      regulatory mistakes and, 283
             Levitt’s tenure at SEC during, 141                    short-selling and, 290
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                                                             Index                                              319

              Credit market:                                       Equity credit lines, 274
                seizure of (2008), 270                             Eyeshade Report, 88, 89n, 313
                severe dislocations in, 279
              Credit Suisse First Boston, 203, 204                 Facebook, 232
              Cruttenden Roth, 89                                  “Fails to deliver,” 167, 167n
              CSFB. See Credit Suisse First Boston                 Fairfax Financial Holdings, 278
                                                                      chart for, 298
              Daewoo, 94, 102, 111                                    investigation of, 192, 249–272
              D’Agostino, Justin, 70, 74, 114                      Fairfax Financial Services, 291
              Danish Car Carriers, 92, 93, 94                      Fairfax Gibraltar, 269
              Decimalization, upticks and, 288                     “Fairfax Project,” 257, 258
              “Deemsters” (Isle of Man), SEC, AremisSoft case      Fannie Mae, 274, 275, 276, 281, 287
                   and, 68–75, 77–84, 86, 113–114, 118, 222        Farrer, David, 79, 80
              DeepCapture.com, 200, 232, 233, 238, 239,            FBI, NovaStar investigated by, 171
                   245                                             Fear factor, 282
              Deloitte & Touche, 58                                Federal fund rates, housing bubble and, 164
              Democrats, American financial system crisis and,      Federal Reserve Board, 12, 164, 275
                   283                                                interbank discount rate uptick (1987), 3
              Department of Justice, 122, 132, 174                    loose monetary policies, asset bubbles and,
                HealthCare Services case and, 25                         283
                NovaStar investigated by, 171                      Federal Trade Commission, 13, 17
              Department of Labor, NovaStar investigated by,          Credit Practices Division, 2, 3–4
                   171                                                NovaStar investigated by, 171
              Depository Trust Corporation, 65                     Feshbach, Joe, 24
              de Ridder, Alex, 87, 101, 111, 119                   Feshbach, Kurt, 24
              Derivatives, 13, 283                                 Feshbach, Matt, 24
              Dictaphone Corporation, 43                           Feshbach Brothers (Dallas), 24, 25, 174
              Disclosure, financial machinery and, 311, 313         Financial innovation, systemic risk presented by,
              Document productions, 179                                  13
              Don’t Blame the Shorts: Why Short Sellers Are        Financial machinery, transparency and, 311
                   Always Blamed for Market Crashes and How        Financial Post, 182
                   History Is Repeating Itself (Sloan), 294n       Financial reinsurance, 254, 262
              Dow Jones Newswire, 161                              Financial Services Authority (UK), 286, 289,
              Dragon Systems, 43                                         290, 294
              Drexel Burnham Lambert, 10, 14, 15                   Financial Times, 287, 294
              Duerden, John, 45, 46                                Finite reinsurance, 253
              Duffy, James, 106                                    Fitch agency, 249, 277
              Dunlap, Al, 90                                       “Flanders Language Valley” (Belgium), 40
              “Dutch auction,” 180                                 Flanders Language Valley Fund, 46, 47
                                                                   Fooling Some of the People All of the Time
              Earnings before interest, taxes, depreciation and          (Einhorn), 174, 312
                   amortization, 241, 242, 243                     Forbes.com, 217
              “Easter Bunny, The.” See O’Brien, Bob                Forbes magazine, 161
              Eavins, Peter, 252                                   Foreclosure sales, 280
              EBITDA. See Earnings before interest, taxes,         Forensic Advisors (Maryland), 88
                   depreciation and amortization                   Fortune magazine, ix, 161, 171, 227, 249, 260,
              Ehrman, Chris, 30                                          313
              Einhorn, Cheryl Strauss, 174                         “Frauds, fads, and failures” (the three Fs), 33
              Einhorn, David, 174, 312                             Freddie Mac, 274, 275, 276, 281, 287
              Eisinger, Jesse, 44, 45, 173, 313                    Front-running, 300
              Enron, ix, 27, 52, 77, 91, 98, 121, 132, 142, 161,   Fuld, Richard, xi, 283, 303, 307
                   169, 223, 249                                   Futures market, portfolio insurance and, 11–12
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           320                                            INDEX


           Gain-on-sale accounting, NovaStar’s pretax              Home ownership, American dream and, 274
                earnings and, 165                                  Hoover, Herbert, 284
           Garbage in, garbage out, 163                            House of Cards (Cohan), 279
           Gemstar-TV Guide, 133                                   Housing and Urban Development, NovaStar
           General Electric, 203                                        investigated by, 171
           Generally Accepted Accounting Principles                Housing bubble. See also Mortgages
                (GAAP), 221, 227, 242, 246                           cheap money and, 275–276
           Gibson, William, 232                                      decline in lending standards and, 276
           GIGO. See Garbage in, garbage out                         federal fund rates and, 164
           Giuliani, Rudy, 15                                        NovaStar and, 163
           Global credit crunch, 280                                 rating agencies and, 277, 278
           Goldman Sachs, 16, 161                                    securitization and, 276–277
             AIG bailout and, 281–282, 307                         Housing market. See also Real estate
             SEC anti-shorting rule, Copper River’s demise           government support of, 274
                and, 296–306                                         2007 stall in, 278
           “Gonzo journalism,” 232                                 HSBC Bank (Monaco), 101
           Google Corporation, 229                                 HUD. See Housing and Urban Development
           Government Sponsored Entities, 274–275                  Hurricane Katrina, 265
           Gradient Analytics, 194, 196, 197, 313                  Hwang, Gary, 94, 111
             Biovail Corporation suit and, 192
             Overstock.com case and, 157–162, 177–191,             Iceland, destabilized economy of, 280
                217, 218–228                                       ICP Capital, 258, 261, 264
             reports and services provided by, 156                 Independent investigations, 122
           Grassley, Chuck, 207                                    India, destabilized economy of, 280
           Great Depression, 283, 310                              Innovation, double-edged nature of, 10
           Greed, 309                                              Insider trading, material information and, 155.
           Greenberg, Hank, 254                                          See also Securities and Exchange
           Greenberg, Herb, 36, 38, 44, 53, 54, 55, 57, 91,              Commission
                97, 165, 166, 186, 189, 190, 191                   Institutional behavior, Parkinson’s “laws” of,
           Greenlight Capital, 174                                       204n
           Greenspan, Alan, 12, 275                                Insurance companies:
           Grimaldi ship line, 88                                     collateralized mortgage obligation sales to,
           Grissom, Larry, 134, 146                                      163
           GSEs. See Government Sponsored Entities                    valuation challenges with, 249
           Gutfreund, John, 23                                     Interest rate environment, housing bubble and,
           Gwynn, John, 252, 253, 256, 272                               275
                                                                   Internal Revenue Service, 264
           Haircuts, 299                                           International Office of Justice, 40
           Hanson, Tom (pseud.), 252, 253, 254, 262, 272           Internet, 166, 229, 232, 235, 239, 310
           Hatch, Orrin, 199, 200                                  Interpol, 111
           Hauspie, Pol, 40, 41, 47, 51                            “In the Matter of Gradient Analytics,” 189
           Hawking, Stephen, 49                                    Investigative journalism, budgetary starvation and
           HealthCare Services, 22, 25, 26, 27, 28                       state of, 313
           Hedge funds, xi, 303. See also Rocker Partners          Investment banks:
             collateralized mortgage obligation sales to, 163         failures (2008), 279–280, 281–282, 283, 284
             failures of (2008), 299                                  severe dislocations in credit market and, 279,
             SEC antishorting rule and, 292, 293                         280
           Heilizer, Deborah, 41, 90                               InvestorVillage.com, 231
           Helburn, Mary, 169
           Heller Financial, 203, 204, 205, 209                    Jacobs, Irwin, 57
           Hemingway, Ernest, 113                                  JAG Media Holdings, 217
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                                                              Index                                           321

              JCPenney, 153, 154, 155, 179                         Mack, John, 202, 203, 204, 205, 209, 210, 211
              J.P. Morgan, 91, 280                                 Mack, Linda, 237
              Junk bonds, 13–16, 309, 310                          “Mad Money,” 190
              Jyske Bank (Denmark), 101                            Madoff, Bernie, 13, 20, 310
                                                                   Mannaerts, Edwinne, 96
              Kang, B. J., 260, 261                                Maremont, Mark, 44
              Kasowitz, Marc, 200, 271                             “Mareva injunction,” 70
              Kasowitz Benson Torres & Friedman, 192, 256,         Market declines, Federal Reserve Board and, 12
                   271                                             “Mark-to-market” accounting, 278
              Kerry, John, 231                                     Martin, Jenna, 56
              Keyes, Rob, 56, 66, 69, 76, 90                       Materiality, 129, 155
              Kingsford Capital, 233                               Matrixx Initiatives, 89n
              KPMG, 132, 133, 136, 137, 139, 140, 142, 144,        Mayor, Heidi, 86, 90, 94, 99, 105, 107, 108,
                   145, 146, 149, 150                                   112, 117
              KPMG Belgium, 42, 43                                 McCain, John, 283
              Kroll & Associates, 141, 142, 145, 146, 150, 173,    McLaughlin, Campbell, 70, 74, 114
                   191                                             McLean, Bethany, 161, 171, 238
              Kynikos Capital, 256                                 Medicare fraud, HealthCare Services case and,
              Kyprianou, Lycourgos, 57, 62, 64n, 66, 67, 69,            25, 26, 27, 28
                   70, 74, 75, 76, 105, 109, 110, 119              Melnyk, Eugene, 192, 193
                                                                   Merhi Ali Abou Merhi, 87, 94, 99, 100, 105,
              Labiad, Aldo, 87, 92, 93, 94, 95, 96, 97, 99, 100,        107, 108
                   101, 102, 103, 104, 106, 107, 111, 112,         Merrill Lynch, 15, 16, 95, 96, 98, 102, 147n,
                   119                                                  281
              Lamont, Owen, 201                                    Message boards, 230
              Layoffs, at financial firms (2008), 299                MFT, 92, 111
              LBOs. See Leveraged buy-outs                         Miers, Harriett, 4
              Lehman Brothers, xi, 303                             Milken, Michael, 13, 14, 15, 16, 17, 175, 234,
                collapse of, 281–282, 283, 284, 289, 290                235, 245
                U. K. operations, 286                              Milosevic, Slobodan, 109
              Lending standards, housing bubble and decline        Mincavage, Karen, 30
                   in, 276                                         “Miscreants’ Ball, The,” 174
              Lerach, Bill, 142                                    Mitchell, Mark, 232, 233, 235, 238
              Lernout, Jo, 40, 41, 51                              Montgomery, Mark “Monty,” 36, 37, 44, 215,
              Lernout & Hauspie, 86, 98, 313                            216, 252, 262, 307
                investigation of, 35–48, 50–52, 89, 173            Moody’s, 277
              Leveraged buy-outs, 10, 14                           Moore, Michael, 86, 90, 94, 104, 105, 106, 107
              Levine, Dennis, 14, 15, 16                           Moral hazard, 12, 281
              Levitt, Arthur, 141, 142, 146                        Morgan Keegan, 252, 255, 256, 258, 264, 272
              Lewis, Ken, 281n                                     Morgan Stanley, 202, 203, 205, 208, 210, 211
              Lindsey, 71, 72, 74, 245                             Morgenson, Gretchen, 164
              Livermore, Jesse, 167, 293                           Mortgage interest payments, tax deductions for,
              Lloyd’s of London, 267                                    274
              Lock-in agreements, 3, 4                             Mortgage originators, housing bubble and, 163
              Lomas Mortgage, 3, 4                                 Mortgages. See also Housing market; Real estate
              “Long-tail” coverage, 267, 268                         default rates, 275, 278
              Lower income buyers, Government Sponsored              lock-in agreements, 3, 4
                   Entities and home ownership for, 275              low-interest rate environment (early 2000s),
              Ludlum, Robert, 234                                       275
              Lynch, Gary, 57, 58, 62                                no-documentation, 309
              Lynde, Russell, 215, 216, 299, 300, 305, 307         Municipal disclosure system, 129
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           322                                           INDEX


           Municipal unions, San Diego city elections and,       Overstock.com, 167, 172, 173, 174, 175, 177,
              124                                                    178, 180, 181, 192, 194, 195, 196, 201,
           Murphy, Dick, 127, 138, 139                               233, 239, 244, 245, 295
                                                                  defamation suits filed by, 173, 177, 199, 200,
           Naikan, Navid, 215                                        217–228, 238
           Naked short-selling, 167, 287, 288, 292                EBITDA numbers and, 241–243
           NASDAQ, 25, 30, 32, 33, 168, 203, 275                  Fairfax Financial Holdings and, 255
           National Coalition against Naked Shorting, 169,        Gradient Analytics, Rocker Partners and,
                172, 292                                             157–162, 178, 182–190, 197, 199
           Nationally Recognized Municipal Securities
                Repositories, 129, 130                           Pan, Christopher, 95, 96, 102
           NCANS. See National Coalition against Naked           Parkinson, C. Northcott, 204n
                Shorting                                         Parmalat, 52, 255
           Neal, Charlie, 86, 90, 91, 93, 102, 104, 105,         Paulson, Hank, 281, 283, 284, 292, 294, 303
                107, 108, 116                                    Paulson Plan, 296
           NERMSERS. See Nationally Recognized                      SEC emergency rule in tandem with, 293
                Municipal Securities Repositories                Pearlrose Holdings, 96
           Newspapers, staff cutbacks at, 313                    Peikin, Steve, 60, 61, 62, 64, 66, 67, 68, 71, 73,
           New York Attorney General, 171, 174                         74, 79
           New York Post, 162, 191, 192, 217, 255, 261,          Penny stock scams, 25
                313                                              Pension funds, collateralized mortgage obligation
           New York Stock Exchange, 9, 86, 90, 97, 98,                 sales to, 163
                203                                              Pension systems, actuaries and, 123
           New York Times, 57, 98, 121, 133, 161, 170, 207,      Pequot Capital Management, 202–211
                238, 240, 261, 291                               Perez, Francis, 96
           NFI-info.net, 166                                     “Phantom stock,” 264
           NMS Services, 262, 263, 264, 265, 266                 Pitt, Harvey, 117
           Nocera, Joe, 161, 191, 193, 228                       Portfolio insurance, 10, 11–12, 277, 309
           No-documentation mortgages, 309                       Pound, Ezra, 169
           Norris, Floyd, 291                                    Poyiadjis, Roys, AremisSoft case and, 59, 60, 62,
           NovaStar Financial Corporation, 159, 162, 169,              64, 65, 66, 67, 68, 69, 70, 71, 72, 73, 74,
                170, 171, 172, 189, 278, 280                           75, 76, 77, 79, 82, 83, 84, 105, 109, 113,
             aggressive gain-on-sale accounting and, 165               114, 118, 119
             annual dividends of, 164, 165                       Predation, populist rhetoric and, 169
             housing bubble and, 163                             Presidential election (2008), world financial crisis
             promotional web sites for, 166, 167                       and, 282–283
           nSpireRe, 259, 267–268, 269, 270                      PricewaterhouseCoopers, 92, 246, 258
                                                                 Program trading, 10, 12
           Obama, Barack, 283                                    “Pump-and-dump” schemes, 25, 28, 34, 288
           O’Brien, Bob (“The Easter Bunny”), 169, 170,          Puwaoski, Kevin, 74, 75, 78, 80, 82, 115, 116,
               191, 194, 195, 216, 230, 234, 235, 257,                 119
               287, 292
             anti-naked shorting cult and, 168                   Racial discrimination, 202
             Byrne joins forces with, 171, 172, 173, 175         Rainier III (prince of Monaco), 106
             NovaStar, Rocker Partners and, 162, 166, 167,       Rating agencies, real estate bubble and, 277,
               189                                                   278
           Odyssey Re, 255, 258, 259, 262, 263, 264, 265,        Reagan, Ronald, 3
               266                                               Real estate. See also Housing market; Mortgages
           Old Man and the Sea, The (Hemingway), 113              residential, government and capital flow into,
           Ontario Securities Commission, 193                        274
           O’Quinn, John, 217                                     subprime mortgage market and, 274, 275, 276
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                                                              Index                                             323

              Real estate lending, private-public partnerships      San Diego Union-Tribune, 121, 129, 135, 137,
                   and, 274–275                                           138, 140, 141, 142, 148, 149
              Reg. SHO list, SEC anti-shorting rule and, 293,       San Francisco Chronicle, 53, 285
                   295, 296                                         SanityCheck.com, 167
              Regulatory agencies, 310                              Sarbanes-Oxley Act of 2001, 122, 283
              Regulatory mistakes, world financial crisis and,       Saunders, 232
                   283                                              Savings, foreign, American housing bubble and,
              Reinsurance, 253, 254, 255, 262, 267, 268                   275–276
              Reminiscences of a Stock Operator (Livermore), 167,   Savings and loan associations, 274
                   293                                              Schumer, Chuck, 200
              Remond, Carol, 306                                    Schwartz, Alan, 279
              Reporters for Freedom of the Press, 221               Scially, Dave, 53, 54, 55, 57, 89, 90, 91
              Republicans, American financial system crisis          SDCERS. See San Diego City Employees
                   and, 283                                               Retirement System
              Reuters, 161, 306                                     Sea Atef car carrier, 86, 93, 94, 99, 108
              Risk analysis models, 277                             Securities and Exchange Commission (SEC), ix,
              Rocker, David, 32, 39, 153, 194, 196, 199, 216,             x, xi, 17, 25, 121, 122, 174, 207, 208, 214,
                   219, 235, 238, 257                                     286, 309, 310, 312, 313
                Byrne, Overstock.com and, 159, 160, 162,              ACLN Limited case, 86–113
                   173, 177, 180, 183, 185, 186, 187, 195,            AremisSoft Corporation case, 54–86, 118,
                   218, 224                                               119, 222
                Fairfax suit and, 257                                 Comparator Systems case, 29, 30, 31
                retirement of, 213, 216, 306                          Division of Corporate Finance, 20
              Rocker Partners, 32, 36, 153, 165, 170, 191,            Division of Investment Management, 20
                   192, 194, 196, 197, 201, 238, 252                  emergency antishorting rule by and
                AremisSoft suit and, 57                                   consequences, 287–296, 297, 300, 304, 306
                Fairfax suit and, 192, 252, 256, 257                  Enforcement Division, 18, 22
                Gradient Analytics, Overstock.com and,                Gradient Analytics investigation, 188–197, 199
                   156–162, 172–174, 177–190, 199,                    HealthCare Services case, 25–27
                   217–227                                            Lernout & Hauspie case, 35–48, 50–52
                investment model motto for, 33                        1934 recall established by, 294
                Lernout & Hauspie and, 45                             NovaStar investigated by, 171
                NovaStar and, 165, 170                                Office of Municipal Securities, 122
              Roeder, Rick, 125, 134                                  Pequot Capital Management case, 202–211
              Rosen, Murray, 70, 79, 82, 84                           post 9/11 New York City office location,
              Rosenfeld, Richard, 56, 63, 65, 66, 67, 69, 70,             194–195
                   74, 75, 76, 77, 78, 80, 83, 94, 105, 119           San Diego City Employees Retirement System
                                                                          case, 123–150
              SAC Capital, 192, 235, 256                            Securities fraud, short squeezes and, 293–294
              Sadak, Kamal, 95, 96                                  Securitization:
              Salinger, Pierre, 237                                   financial services industry profits and, 276–277
              Salomon Brothers, 23                                    subprime mortgages and, 163, 164, 165
              Samberg, Arthur, 204, 209, 211                        Senate Judiciary Committee, 199, 200, 202, 203,
              San Diego City Charter, 145                                 206
              San Diego City Employees Retirement System,           Seo, Joo Chul, 46, 51, 52
                   123–150                                          September 11, 2001 terrorist attacks, 194, 287
                Manager’s Proposal I and, 125, 135, 143, 149        Sharpe, William, 11
                Manager’s Proposal II and, 126, 127, 135, 139,      Shea, Pat, 127, 137
                   143, 148, 149                                    Shipione, Diann, 127, 128, 133, 135, 137
              San Diego Municipal Code, 124, 127, 145               “Short-and-distort” manipulation, 25
              San Diego pension system scandal, 121, 122            Short funds, significant losses in (2008), 305
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           324                                            INDEX


           Short sales:                                          Thompson, Hunter S., 232
              convertible arbitrage market and, 290              Thomsen, Linda, 205, 206, 208, 210
              defined, x                                          Thornton, Grant, 246, 247
              regulation of, 288                                 Toxic assets, 277, 311
           Short-sellers:                                        Toxic waste tranches, 164, 165
              “great extinction” during Clinton second           Transparency, financial machinery and, 311
                 term, 32                                        Treasury Department, 23, 280, 281, 282, 283,
              massive naked shorting and, 167                         284, 292
           Short-selling rule (emergency powers), invoked        Troubled Asset Relief Program, 311
                 by SEC, and consequences related to,            Turner, Lynn, 141, 142, 146
                 287–296, 297, 300, 304, 306
           Short squeezes, 293–294                               Unions, San Diego pension system and,
           Simon, Stormy, 162                                        124–125, 126
           Singapore Securities Commission, 47                   “Uptick rule,” elimination of, 288
           Sitrick, Michael, 192
           Sitrick and Company, 192, 256                         Vervaet, Patrick, 87, 88, 103
           60 Minutes, 188, 192, 193, 199                        Vickrey, Donn, 156, 159, 180, 182, 183, 185,
           Skilling, Jeffrey, 148                                    186, 187, 196, 197, 224, 227
           Sloan, Robert, 294n                                   Vinson & Elkins, 122, 130, 142, 149, 150, 177,
           Smith, Herbert, 70, 80                                    213
           Social Security, 123, 141
                                                                 W. R. Hambrecht, 180, 182
           “Solvent scheme or arrangement,” 268
                                                                 Wallander, Mike, 65
           Specter, Arlen, 199, 200, 201, 207
                                                                 Wall Street Journal, 154, 161, 170, 191, 207, 313
           Sphere Drake, 268, 269, 270
                                                                 Washington Post, 172
           Spitzer, Eliot, 20, 117, 188, 254
                                                                 Waste Management, 121
           Stahl, Leslie, 193
                                                                 Watsa, Vivian Prem, 250, 251, 255, 256, 257,
           Standard & Poor’s, 277
                                                                      270
           Stone, Oliver, 107
                                                                 Webb, Lee, 232, 246
           “Story of Deep Capture, The” (Mitchell), 232,
                                                                 Webber, Paul, 128, 129, 130, 132
                 233, 235, 236
                                                                 Web-threads, 313
           “Strategic Lawsuit Against Public Participation”
                                                                 Weil, Jon, 287
                 statute, 218, 219, 220, 221, 224
                                                                 Weiss, Gary, 169, 231, 232, 237, 239–240, 313
           Street Insight, 160
                                                                 Weiss, Milberg, 115, 116, 119
           Structured products, collateralized mortgage
                                                                 “Wells notice,” 154–155
                 obligations as, 163–164
                                                                 Whistleblowers, 226, 227
           Subprime mortgage origination, 276
                                                                 White, Mary Jo, 205, 208
           Subprime mortgages:, 13
                                                                 White Rock Capital, 174
              Fed’s money policies and, 275
                                                                 Wikipedia, 232
              industry collapse and, 164, 275, 280
                                                                 Wilkie Farr & Gallagher, 141, 145, 150
           Sunbeam Corporation, 52, 77, 90, 121
                                                                 WorldCom, ix, 27, 52, 77, 91, 121
           Supreme Court, 132, 148, 155
                                                                 World Financial Center, SEC offices at, 195
           Sussman, Richard, 299, 302, 303, 304
                                                                 World financial crisis, regulatory mistakes and,
           Swift Boat Veterans, 231
                                                                      283
           Swiss Re, 254
                                                                 World financial system, destabilization of (2008),
           Systemic risk, regulators and, 281n
                                                                      280
                                                                 Wyden, Ron, 191
           TARP. See Troubled Asset Relief Program
           Tax deductions, for mortgage interest payments,       Xerox Corporation, 132
                274
           Taxes, San Diego pension system and, 124, 126         Yahoo!, 230
           Technology stocks bubble, 164
           TheStreet.com, 53, 57, 91, 252                        Zeta-Jones, Catherine, 78

				
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