• 287 days Will The ECB Continue To Hike Rates?
  • 288 days Forbes: Aramco Remains Largest Company In The Middle East
  • 289 days Caltech Scientists Succesfully Beam Back Solar Power From Space
  • 689 days Could Crypto Overtake Traditional Investment?
  • 694 days Americans Still Quitting Jobs At Record Pace
  • 696 days FinTech Startups Tapping VC Money for ‘Immigrant Banking’
  • 699 days Is The Dollar Too Strong?
  • 699 days Big Tech Disappoints Investors on Earnings Calls
  • 700 days Fear And Celebration On Twitter as Musk Takes The Reins
  • 702 days China Is Quietly Trying To Distance Itself From Russia
  • 702 days Tech and Internet Giants’ Earnings In Focus After Netflix’s Stinker
  • 706 days Crypto Investors Won Big In 2021
  • 706 days The ‘Metaverse’ Economy Could be Worth $13 Trillion By 2030
  • 707 days Food Prices Are Skyrocketing As Putin’s War Persists
  • 709 days Pentagon Resignations Illustrate Our ‘Commercial’ Defense Dilemma
  • 710 days US Banks Shrug off Nearly $15 Billion In Russian Write-Offs
  • 713 days Cannabis Stocks in Holding Pattern Despite Positive Momentum
  • 714 days Is Musk A Bastion Of Free Speech Or Will His Absolutist Stance Backfire?
  • 714 days Two ETFs That Could Hedge Against Extreme Market Volatility
  • 716 days Are NFTs About To Take Over Gaming?
Another Retail Giant Bites The Dust

Another Retail Giant Bites The Dust

Forever 21 filed for Chapter…

How The Ultra-Wealthy Are Using Art To Dodge Taxes

How The Ultra-Wealthy Are Using Art To Dodge Taxes

More freeports open around the…

Billionaires Are Pushing Art To New Limits

Billionaires Are Pushing Art To New Limits

Welcome to Art Basel: The…

  1. Home
  2. Markets
  3. Other

Robert Rubin's Insider Trading Case, Swept Under the Rug?

In the first of a series of articles, which could easily become the-rest-of-my-life's work, I will be examining high-profile lawsuits and indictments, such as -- what's happening with the federal lawsuit against Robert Rubin for insider trading -- and others.

On December 4, 2008, the New York Post reported: "A new Citigroup scandal is engulfing Robert Rubin and his former disciple Chuck Prince for their roles in an alleged [CDO-related] Ponzi-style scheme that's now choking world banking. [The two] are named in a federal lawsuit for an alleged complex cover-up of toxic securities that spread across the globe, wiping out trillions of dollars in their destructive paths." However -- and here's the indictable offense (worldwide Ponzi scheme, although worthy, is unlikely to be one) -- before Citi's stock collapsed, Rubin and other top insiders cashed out of more than $150 million in "suspicious stock sales" according to the lawsuit filed on behalf of investors.

On December 11, 2008, this item was picked up by an online news service out of Phoenix, phxnews.com. The only other comment was mine for BlownMortgage.com: Growth Industry 2009: Criminal and Constitutional Law, on December 23, 2008. Not only did these three publications have the scoop, but apparently there was nothing left to be said.

And then . . . on January 9, 2009, Citi announced that Robert E. Rubin retired as Senior Counselor effective that day and he would not stand for re-election as Director. Mr. Rubin would continue to serve as a Director until his current term expired at Citi's next Annual Meeting. Hadn't he been on the short list for Treasury Secretary as well?

On that very same day, WSJ's MarketWatch asked readers: "How will people remember the Robert Rubin era at Citigroup? Right now, the smart money is on "a nightmare." For all of his supposed prowess in financial markets, the former Goldman Sachs Group Inc. banker and U.S. Treasury Secretary presided over an era of scandal and risk overload during his nine years as a director and consultant at Citigroup . . . which ended "after a humiliating 18 months that has seen Citi oust Weill-successor Charles Prince, take $83 billion in writedowns, raise $36 billion in investor cash, take $40 billion from taxpayers, and get the government to backstop more than $250 billion in risky assets on its balance sheet . . . and a 90% decline in stock price." And keep in mind that this article was dated January 9th. Today is January 21st so the bailout numbers are higher and the stock price lower.

Anyway, it sounds like they could be on to something.

Then, on January 13, 2009, David Weidner wrote a piece about Rubin for MarketWatch pointing out that during Rubin's time as Treasury Secretary, he and then Fed Chairman Alan Greenspan "oversaw the most sweeping deregulation movement in the history of Wall Street, the pinnacle of which was the elimination of Depression-era laws that made it illegal for a company to have both commercial banking and investment banking on a large scale." This allowed the merger of Citicorp with Travelers insurance in 1998. Only one year later, Rubin left the Treasury and became Director and Senior Counselor of Citigroup. "There, he made $150 million (not including stock options) and, depending on whose account you believe, was either a tireless worker or a once-a-month visitor to the corporate headquarters." Weidner sums up with "Robert Rubin is out at Citigroup Inc., and it only cost about $300 billion in committed taxpayer money." ***Worldwide Ponzi scheme strikes me as tireless worker, but then Weidner doesn't seem to know about the federal suit.***

One more try. Googled the story again today; you'd think by now someone must be on to it. And there it was, on January 16, 2009, an article on Bloomberg by Michael Lewis, author of Liar's Poker. ***Now you're talking, he's the insider's whistle blower.*** No, it turns out Rubin has published his memoirs and Lewis wrote a book review. In a very poorly written piece BTW, Lewis says, Rubin is "an acute and decent man . . . and . . . the world's a better place for having him in it."

If you say so, Michael.

 

Back to homepage

Leave a comment

Leave a comment