David Rosenthal: belief

Transcript context

…Of course, while it's illegal to bid on behalf of your clients who are not placing orders and that it's even more illegal to bid on behalf of imaginary clients, it's also illegal to try and corner the market on a given auction. There are rules in place that say things like you can't try and bid for more than 35% of any given auction because we need it to be able to be spread around because we don't want this big second market for people paying a big premium because someone managed to go get 90% of the allocation. Totally. The reason they don't want this to happen is what actually happens as a result of Mozer's actions. Three or four small financial firms that couldn't absorb this price volatility go bankrupt. This is real. What the deed did. I think he did this like four or five times and the net of all of it was Salomon made an incremental $4 million in profit. All this for $4 million. It turns out he did it multiple times. It turns out that Merriweather, who was his boss in the chain of command, and Gutfreund knew about this four months ago. They knew about it because the SEC started investigating and got in touch with them. When that happened, the general counsel, the Prince of Darkness, told Gutfreund that what was happening here was criminal. But that, technically, they didn't have any technical obligation to report it to anyone. The CEO is sending letters to the general counsel without notifying the board. Hey, I got this letter from the SEC. They're investigating us. But just the GC needs to know about it.…

Stored transcript either side of the excerpt. The highlighted words are the published quote; the surrounding text is unedited source, never generated.