US judge bemoans lack of fraud prosecutions on individuals
In recent months, Jed Rakoff, US District Judge for the Southern District of New York, has been fulminating over why it is that none of the senior executives in the financial institutions that helped precipitate the financial crisis have not been prosecuted.
He recently assembled his views in a piece for the New York Review of Books in which he reflects gloomily that, because most of the relevant criminal provisions are governed by a five-year statute of limitations, the likelihood of anyone being prosecuted, let alone going to jail, is remote.
He notes that the US government’s Financial Crisis Inquiry Commission, in its final report, uses variants of the word “fraud” no fewer than 157 times. He writes “in describing what led to the crisis, concluding that there was ‘a systemic breakdown’ not just in accountability, but also in ethical behaviour”.
According to the report, the signs of fraud, particularly mortgage fraud, were everywhere to be seen, yet he says the Department of Justice was notably cautious, a position articulated by Attorney General Eric Holder, who said prosecution could “have a negative impact on the national economy, perhaps even the world economy”. This “too-bigto- jail” approach, Rakoff says, led to an emphasis on nonprosecution agreements where firms rather than individuals were fined.
But he says “the fear of prison resonates far more than the writing of a cheque” and the practice is unhelpful in the long run. The too-big-to-jail approach flouts the notion of treating everyone equally under the criminal law. “Punishing a company and its many innocent employees and shareholders for the crimes committed by some unprosecuted individuals seems contrary to elementary notions of moral responsibility.”
Xiaomi, one of the fastestgrowing mainland mobile manufacturers, recently staged its first flash sale in Hong Kong with spectacular results. It says it sold 10,000 of its Hongmi phones in 36 seconds. Earlier in the year, it sold 100,000 of the same phone in just 90 seconds on the mainland, it said on its Weibo account.
Typically, flash sales are a time-limited offer at high discounts. The Hongmi sells at HK$999, which is its usual price, but it comes at a considerable discount to other smartphones despite its comparable, and in some cases superior, specifications.
Xiaomi, the mainland’s thirdlargest e-commerce company, also sells the country’s most popular mobile phone, the Mi28.
In July, analytics firm Flurry said there were 261.33 million active smartphones and tablets on the mainland. Of these, it said 65 per cent were Android devices and the rest were on iOS. Apple made 35 per cent of smart devices used on the mainland, while Samsung Electronics was second with 15 per cent. Xiaomi was in third place with 6 per cent in what is only its second whole year of production.
Hedge fund salaries on the rise
After several years of pedestrian performances in Asia, hedge funds are starting to rally, and this is starting to be reflected in compensation, says professional services firm Heidrick & Struggles.
According to the firm’s second annual Hedge Fund Compensation Survey (Asia 2013), base salaries for hedge fund staff are starting to be adjusted. “In both 2012 and 2013, 40 per cent of respondents reported increases in base salaries with rises skewed in favour of junior analysts and execution traders whose salaries have been worst affected over the past few years.”
About 50 per cent of respondents reported that their funds were looking for staff, with 10 per cent actively hiring and 40 per cent taking an opportunistic approach.
Citi raises US$1m for Philippines
Citi has announced that one month after launching a worldwide appeal to its clients and employees in support of the victims of Typhoon Haiyan in the Philippines, it has raised more than US$1million.
This will go to the Philippine Red Cross, the American Red Cross and Gawad Kalinga. In addition, the Citi Foundation is planning to double its annual grant investment in the Philippines for 2014 to more than US$500,000 for longer-term rebuilding and livelihood restoration programmes in the country.
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