Thursday, April 21, 2011

In the Public's Benefit - Installment 2011-1

Brooklyn, New York, lawyer Jason Goldfarb, 32, admitted today to taking part in what the U.S. says is one of three Galleon Group LLC insider-trading rings. Goldfarb, pled guilty to conspiracy and securities fraud before U.S. District Judge Richard Sullivan in Manhattan.

Goldfarb (Brooklyn Law School) was accused of conspiring with ex-Galleon trader Zvi Goffer to pay tens of thousands of dollars to Arthur Cutillo and Brien Santarlas, lawyers at Boston-based Ropes & Gray LLP, for information about transactions their firm was working on.

As part of the plea agreement, Goldfarb won’t be prosecuted further by the U.S. Attorney’s Office for the Southern District of New York, except for any potential criminal tax violations, according to a copy of the pact.

Goldfarb's plea raised to 20 the number of defendants who've done so in what authorities call the largest hedge fund insider trading case ever.

Goldfarb was arrested in 2009 in connection with the Galleon Group hedge fund prosecution. Galleon's founder, Raj Rajaratnam, is currently trial now. Prosecutors claim the Wall Street insider used "corporate spies" to get rich off inside trades. He insists he was merely a savvy investor.

According to Wikipedia (today), Federal Election Commission records indicate Rajaratnam made over $75,000 in political contributions in the past five years. He has also contributed to the Democratic National Committee and various campaigns on behalf of Hillary Rodham Clinton, Charles Schumer, and Robert Menendez.

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Why pick on law schools?

Law schools do not seem to compete for the public's benefit; school reputations currently connote to the public vague expectations of how brazen and arrogant their graduates may behave, rather than the innate integrity of their respective graduates.

Improving law school admissions standards, although certainly in the public interest, is highly unlikely. After all, law schools are not military academies and most lawyers were never Eagle Scouts nor recipients of Girl Scout equivalent Gold Awards.

Why pick on lawyers?

A disproportionate percentage of law graduates (hardly 2% of the entire workforce) are currently elected to over 20% of public offices (including 60% of the U.S, Senate and 100% of the U.S. Supreme Court). This presents conflicts of interest and publicly unintended concentrations of authority. Combined with self-serving laws tailored to give incumbents subtle advantages over challengers, the country is in growing peril of a permanent political class.

Meanwhile, proceeds of the underlying crimes are certainly adequate to provide corruptive influences in government at every level.