the s.e.c. has charged the firm. a lot of investors have already pulled out their money they only have around $1 billion in outside investor money left. so in that respect, if even the end result of that you will is cohen himself get banned from the securities industry, all that means is that he cannot trade outside investor money. he cannot serve as an investment adviser. and he's almost effectively at that point now. most of the capital that remains in the fund is his own personal wealth. >> sreenivasan: as you mentioned, he faces no criminal charges. what's the impact to the rest of the street? does it send a strong enough message? this is a huge firm they're going after and this is a culture they're kind of laying open. >> yes, i think preet made that pretty clear. he's trying to discourage greed-- at least that's what he said. he's trying to discourage cheating. this is a firm that had achieved legendary status on wall street. it was the biggest and most successful for the most number of years noong a peer group

to make matters worse, the firm doesn't allow the dealers to return unsold stock. instead it passes all of the losses on to the dealers. in the face of mounting anger, the dairy maker announced last month that it agreed with some dealers to set up a fund to assist their operations, but the majority of them remain unsatisfied as past damages are not included in the deal. similar problems are coming to light in the retail industry. since april, three people who ran franchises of major convenience store chains have committed suicide. the incident drew sharp reaction from president park geun-hye. >> translator: these practices shouldn't be allowed under a government that prizes a fair market economy. i'm committed to wiping out unfair trade in south korea. >> reporter: the ruling party has submitted the draft bill to the national assembly that aims to stamp out unfair practices of some big companies. but an expert says more is needed. he says that to bring about fundamental changes, the economic structure that gives absolute power to a small number of conglomerates has

the firm has so much invested cash, though, the real benefit to the firm is about $150 million of pretax income if short-term rates -- the overnight rates move 150 basis points. so we haven't seen any of that yet. but we're poised certainly when the short-term rates move, to really get a big gain from that. >> but you did say in your report that an upsurge in interest rates in the month of june resulted in trading losses, despite lower inventory levels. so if we were to continue to see these moves in interest rates, how do you -- how do you offset that? what do you do at raymond james knowing that, you know, we're seeing an impact in terms of trading losses? >> you have to remember in june we had really near-record. we had movements in the municipal long-term rates, 10 and 30-year bonds near record, matching the '08 movements. even though we were down, we did suffer some losses there. but generally, we're hedged in our portfolio. and without dramatic movements, if you have constant movements, we're fine. again, you know, our portfolio's pretty small versus our overall business. so we've

charges but not the man behind the firm. that's coming up. liz: federal prosecutors have filed criminal charges as you know against sac capital today saying the hedge fund engaged in insider trading widespread insider trading for more than a decade between the years of 1999 and 2010. david: liz macdonald is outside the courthouse today. she was able to speak to one of the key players in the lawsuit. she has a fox business exclusive. liz? >> yeah, we also spoke to the u.s. district attorney preet bharara at the press conference. it broke up about three hours ago. he is saying essentially this is pervasive fraud. it was part of the business culture to actively cheat. we asked preet bharara what about indicting steve cohen the founder of sac capital? he said to fox business they are essentially developing all evidence. we also asked the top official who helped run the new york office of the fbi, whether or not they're continuing to pursue a case against steve cohen. here is what george venizelos told fox business a few hours ag

the ripple effects here will go well beyond just the one firm. back to you. >> bertha, we are getting word of a press conference later on today and can you walk us through what the rest of the day may look like? >> i would imagine that we will get the press conference hearing first from the firm to hear their response from this and no doubt they will rigorously defend themselves against the charges. they say in the complaint as well that there are eight fund managers who are employees who are identified as being involved in the scheme. but others, they say, that are not named. so it might be interesting to see whether there might be other individual charges coming down the line here. >> yes, entity defendants. thank you, bertha. jim? >> maybe the government has someone who says, listen, they used to tell me, listen, keep it out and don't put a piece of paper on it, because this whole thing in entirety says that the compliance operation was a sham and the whole company was set up to hire people who had an edge and not ask them how they got their s

the firm s.a.c. capital, the hedge fund that's been investigated for a number of years, the s.a.c. management is trying to reassure the staff and today issued an e-mail this morning, saying, quote, the firm will operate normally and we have every expectation that will be the case going forward, unquote. that's from a morning e-mail sent out to the entire staff. the other issue they're trying to let other people know about is the performance has been slow and steady and is now off about 10%, that's through mid-july. for the first part of july, they were up 1.6%. but based on the gains they've made in prior months of the year, that's out to about 10, and the uam is reduced but still $14.2 billion, down from 15 at the beginning of the year. remember, they've had billions of dollars in investor withdrawals so far this year, but that money has flowed out gradually through the course of multiple quarters, so we'll not seat the full impact until closer to the end of the year. so they're trying to keep spiri

or it shows the course i was intimately involved in the cash management activities of the firm he knew. how severe money was at risk for the bankruptcy when he went before congress he said well i simply don't simply don't know where the money is and we know from those the c.s.t. see complaint which cites numerous recorded phone calls he knew damn well where the money went. and also the trustees report showed that j.p. morgan's chief risk officer very super zero call corps i'm three days before the bankruptcy to say hey we think customer money is at risk here j.p. morgan was the custodian. i mean they were saying. basically m.f. global sent two hundred million dollars i believe over to j.p. morgan and then j.p. morgan want wanted what's called a comfort letter that said this was not customer money and the person handling that was laurie ferber she's an ex goldman sachs employee who at the time was the general counsel of and that's global and she kind of hemmed and hawed over the weekend as i understand about that letter and it was never signed i'm just wondering why are we seeing any ch

to make matters worse, the firm doesn't allow the dealers to return unsold stock. instead it passes all of the losses on to the dealers. in the face of mounting anger, the dairy maker announced last month that it agreed with some dealers to set up a fund to assist their operations, but the majority of them remain unsatisfied as past damages are not included in the deal. similar problems are coming to light in the retail industry. since april, three people who ran franchises of major convenience store chains have committed suicide. the incident drew sharp reaction from president park geun hye. >> translator: these practices shouldn't be allowed under a government that prizes a fair market economy. i'm committed to wiping out unfair trade in south korea. >> reporter: the ruling party has submitted the draft bill to the national assembly that aims to stamp out unfair practices of some big companies. but an expert says more is needed. he says that to bring about fundamental changes, the economic structure that gives absolute power to a small number of conglomerates has

as he indicated we met with him and the firm he reports and the other firm. they're willing to pay. it's not a matter of free use of the public right-of-way, and without those -- requiring those specialized privileges they're welcome today to come and use the city streets. they just would have to abide by parking regulations which i think frankly doesn't really work with their business model, so i don't think it was appropriate to include in this pilot because it's a different thing, but the reason why we're not bringing to you at this point a pilot with regard to them is a few reasons. one as far as we know it's not independent research to validate the benefits that result from traditional sharing would result with one way car sharing. one could argue intuitively that one way sharing could increase auto use. i think they make strong compelling arguments like traditional car sharing it would decrease auto use, auto ownership but we don't know that and we felt before we grant special privilegeos the public right-of-way we would like to see more independent evidence that it would achi

they're both bde firms as they lead the leed consultant firm. cd is obviously a team that has been around for a long time and knows authority very well and they have history with a lot of the projects. and vice has done this type of work for the county [inaudible] we have on the other side of the bay and they'll work with doing program management and engineering services. so those are the two firms that we are recommending and what we are seeking here today is your recommendation to award the one year consultant contract to the two firms with an option to extend to two years for the amount of 1.8 million dollars. you have any questions, i'm here. >> i think i see one question. commissioner wiener. >> thank you and thank you for that presentation. so i just have a question -- it's not really just for this, but it probably goes a little broader and that -- we discussed this before about the use of outside consultants. backing up in terms of what the ta does, obviously the ta is not the implementing agency. i know sometimes with doyle drive where t

global exactly and the day before the bankruptcy or a firm or who is m.f. global's general counsel sent e-mails to the f.c.c. m a c s u c indicating that there was a significant shortfall in the customer segregated accounts yet the next day november first in bankruptcy court m.f. global's bankruptcy counsel cans them on scat and went before the judge and misrepresented it saying that there were no. he specifically said there was no shortfall in the broker dealer and then a c f t c attorney stood up shortly after that nobody corrected this and they were headlines out that day that said the money that there's no shortfall and this was one of the events that led the futures industry into a shortfall after it was discovered that there was a shortfall so i mean you started out with the customer commodity customer coalition you helped found it to deal with the fact that there was nobody looking out for the futures industry at that time and what was it like in those early days . i mean it was actually. i'm a licensed attorney but i've never practiced a day of all

charges their customers some of the highest fees in the industry however the firm has been under intense scrutiny over insider trading allegations and april as they see capital settled with the securities and exchange commission and paid a six hundred million dollars civil penalty but apparently that was not enough to satisfy the department of justice because today a federal prosecutors filed criminal charges against the firm alleging they were involved in a decade long insider trading scheme giving hundreds of millions of dollars of trust on its profits these charges could put billions of dollars at risk to be forfeit to the government the feds also want to band in individual residing inside greenwich connecticut as they see owner for managing client money for the rest of his life. individual they are alluding to is stephen cohen insider trading is a very serious crime with civil and criminal penalties as thomas the choreo quoted in the wall street journal the message that's coming allowed in clear from the government is they're not going to tolerate insider trading on wall street to be

the firm, and because the company did not effectively police its own precincts. as alleged in the indictment, the sac companies went out of their way to find employees with personal networks of company insid insiders but did not correspondingly consider whether the employees were using such contacts to obtain inside information despite red flags. by way of just one example, john horvath was an analyst in the tech sector for one of them charged today. they touted horvath had investment ideas by mining data points, closed quote. last september mr. horvath pled guilty for mining illegal inside information from that very network. the failures of sac to police itself are legion as alleged in the indictment. red flags and warning signs were repeatedly ignored until late 2009. the compliance department rarely reviewed electronic communications by sac employees containing suspicious terms, and failed to detect "the insidet t trading by any of the people to date. sac identified possible insider trading by any of its employees just once. and on that occasion, sac not only

>> so the fact that they indicted the firm and not him, they indicted individuals at firm and not him points to the weakness of the case specifically against him. otherwise they would have gone for him. melissa: i guess but there are at love people who are saying on the sidelines, they're holding their breath and waiting, that will be the last shoe to drop. you don't think so? >> they may go after him and may find stronger evidence against him or have people testify because there are people who made guilty please. there may be individuals who make guilty pleas and point the finger to give the government a strong enough case. that is a sign they don't have a strong enough one. by going affirms you're hurting other people. you're hurting complily innocent clients of the firm. melissa: jason, we heard a lot about the case today and it seems that, you know, basically it's about stevie cohen who was, you know, thought to be the greatest trader on wall street. he was somebody who was so good at this burst trading, something computers do now, algorithmic trading where you're trading technica

they indicted the firm. the theory is they're going to try to get substantial monetary penalty out of the firm -- liz: but yet another guy has been fingered for this today. >> today. yeah, i mean, listen, here's the thing when it comes down to it. there's a lot of talk whether this is u.s. attorney having, you know, this vendetta existence steve cohen -- liz: overreach. >> and i as someone who, as you know, i'm pretty fair about this. i've been critical of cohen, and i've within saying that, you know, they should either put up or shut up and charge him or not. i would say that these charges, if you belief insider trading's a bad deal, these charges are completely warranted. there was, i mean, think about it. all the instances of insider trading at sac capital over the last five years and, you know, if that goes unabated and it just keeps going and keeps building up, the government is going to take remedial action. liz: and they worked with the fbi, let's remind people of this, because liz macdonald was inter

charges their customers some of the highest fees in the industry however the firm has been under intense scrutiny over insider trading allegations and april as they say capital settled with the security and exchange commission and paid a six hundred million dollars civil penalty but apparently that was not. of justice because today a federal prosecutors filed criminal charges against the firm alleging they were involved in a. gaming hundreds of millions of dollars of trust on its profits these charges could put billions of dollars at risk to be forfeit to the government the feds also want to ban and the vidual residing inside greenwich connecticut the s a c owner for managing client money for the rest of his life. individual they're alluding to is stephen cohen insider trading is a very serious crime with civil and criminal penalties as thomas the choreo quoted in the wall street journal the message that's coming allowed in clear from the government is they're not going to tolerate insider trading on wall street to better understand what exactly as they see capital advisors did wrong let

charges their customers some of the highest fees in the industry however the firm has been under intense scrutiny over insider trading allegations and april as they say capital settled with the security and exchange commission and paid a six hundred million dollars civil penalty but apparently that was not enough to satisfy the department of justice because today a federal prosecutors filed criminal charges against the firm alleging they were involved in a decade long insider. a trading scheme giving hundreds of millions of dollars of trust on its profits these charges could put billions of dollars at risk to be forfeit to the government the feds also want to ban and the vidual residing inside greenwich connecticut as they see owner for managing client money for the rest of his life. and the visual they are alluding to is stephen cohen insider trading is a very serious crime with civil and criminal penalties as thomas a choreo quoted in the wall street journal the message that's coming allowed in clear from the government is they're not going to tolerate insider trading on wall street to

charges their customers some of the highest fees in the industry however the firm has been under intense scrutiny over insider trading allegations and april as they say capital settled with the security and exchange commission and paid a six hundred million dollars civil penalty but apparently that was not enough to satisfy the department of justice because today a federal prosecutors filed criminal charges against the firm alleging they were involved in a decade long insider trading scheme gaming hundreds of millions of dollars of trust does on its profits these charges could put billions of dollars at risk to be forfeit to the government the feds also want to band in and the vidual residing inside greenwich connecticut the s a c owner for managing client money for the rest of his life. and the visual they are alluding to is stephen cohen insider trading is a very serious crime with civil and criminal penalties as thomas the choreo quoted in the wall street journal the message that's coming allowed in clear from the government is they're not going to tolerate insider trading on wall str

the firm will appeal to a higher court and claims the issue was settled by a 1965 agreement. four former workers have filed a lawsuit seeking compensation from nipon steel and somimoto metal saying they were forced to work at steel mills from 1940 through 1945. on wednesday the court order erred the company to pay about $90,000 to each oh of the four plaintiffs. it was the first ruling of its kind in south korea or japan. >> translator: i never even dreamed that we would win the lawsuits. we really appreciate all our supporters. >> the japanese government interprets an agreement with south korea during treaty talks that normalized relations in 1965. means that the issue of post war compensation was fully resolved. a ruling last year by south korea's supreme court said that the right to seek compensation against the japanese steelmakers was not invalidated by the treaty. japan's supreme court maintains that individuals no longer have the right to seek compensation. japan's top government spokesperson says japan cannot accept the south korean court's ruling. >> translator: the

or it shows the corps i was intimately involved in the cash management activities of the firm he knew. how summer money was a risk paid for the bank when he went before congress he said well i simply don't simply don't know where the money is and we know from those that see if you see compliant cites numerous recorded phone call he knew damn well where the money. and also the trustees report showed that j.p. morgan's chief risk officer barry super zero call corps on three days before the bankruptcy to say hey we think customer money is at risk here j.p. morgan was the custodian of a customer i mean they were going to say i'm. basically m.f. global's sent two hundred million dollars i believe over to j.p. morgan and then j.p. morgan want wanted what's called a comfort letter that said this was not customer money and the person handling that was laurie ferber she's an ex goldman sachs employee who at the time was the general counsel of and that's global and she kind of hemmed and hawed over the weekend as i understand about that letter and it was never signed and i'm just wondering why

or it shows the corps i was intimately involved in the cash management activities of the firm he knew. how summer money was a risk paid for the bank when he went before congress he said well i simply don't simply don't know where the money is and we know from those that see if you see complaint which cites numerous recorded phone calls he knew damn well where the money went. and also the trustees report showed that j.p. morgan's chief risk officer barry super zero call corps on three days before the bankruptcy to say hey we think customer money is at risk here j.p. morgan was the custodian of a customer i mean they were going to a same town basically m.f. global sent two hundred million dollars i believe over to j.p. morgan and then j.p. morgan want wanted what's called a comfort letter that said this was not customer money and the person handling that was laurie ferber she's an ex goldman sachs employee who at the time was the general counsel of and that's global and she kind of hemmed and hawed over the weekend as i understand about that letter and it was never signed and i'm just w

one of the firms has already come up with its next plan. it will open another theme park style area this december. the new stop will replicate the shops dating back to over 200 years ago. the location used to be a gate way, the former city name of tokyo. a folklore express was hired to incorporate the designs. a replica of what it used to look like back in those days. >> translator: the goal of our business at these areas is to provide entertainment for people traveling on the expressways. we will continue to develop various types. for expressway firms, developing leisure venues have become a crucial corporate plan and hope their business will invigorate the local tourism industry as well. nhk world, tokyo. >>> here are the latest market figures. >>> there's heavy rain in northern japan. rachel ferguson from the weather team has more. >> hey there, yes we've been looking at very heavy rain into northern japan. we have a front line here and low pressure system that's been bringing flooding rains in portions of northern china. now it's moving

charges their customers some of the highest fees in the industry however the firm has been under intense scrutiny over insider trading allegations and april as they say capital settled with the security and exchange commission and paid a six hundred million dollars civil penalty but apparently that was not enough to satisfy the department of justice. today a federal prosecutors filed criminal charges against the firm alleging they were involved in a decade long insider trading scheme giving hundreds of millions of dollars of trust on its profits these charges could put billions of dollars at risk to be forfeit to the government the feds also want to band in individual residing inside greenwich connecticut as they see owner for managing client money for the rest of his life. then the visual they are alluding to is stephen cohen insider trading is a very serious crime with civil and criminal penalties as thomas a choreo quoted in the wall street journal the message that's coming allowed in clear from the government is they're not going to tolerate insider trading on wall street to better u

the aim was to eliminate all competition for the ebooks. the firm will appeal the ruling. the officials said apple has done nothing wrong and the firm will continue to find against the false accusations. they sued apple and the publishers back in april of 2012. they said apple introduced a scheme to gain 30% of sales in return for allowing publishers to set prices. the publishers have reached a settlement with the justice department. that's the latest in business news. i will leave you with a check on markets. . >> some residents are still waiting to go home. advanced tracts of land are waiting to be restored. and more than half of fishing ports on the pacific coast must be rebuilt. people in north eastern japan still face challenges following the 2011 disaster. but step by step, they are moving forward. see their stories every wednesday on the road ahead right here on "newsline." >> workers at the fukushima nuclear plant are struggling to cope with one problem after another. nuclear regulators say it's highly likely that contaminated water is seeping into the sea. they ha

understanding with small and emerging firms than any other firm in the program. wanted to underscore what -- we have mou's in place with and so basically what we do is we give them opportunities first of all to be on our teams and then doing this highway work can be pretty complicated if you've never done it, the cost proposals, the audits, how the work is done in accordance with cal transstandards and things like that. some of the firms we've had mou's with in the past have moved on and are doing real well now. >> are they competing against you. >> in some cases. >> i guess that's a determinant that the program's successful. is it very specific that you will take them on projects and... >> it did you want list specific projects, but what it does -- it's an agreement between us and them that first of all, describes what the intent of the program is and that we are going to make an effort and they're going to be receptive and that the idea though is there's in guarantees. they still have to perform and have to meet the scope that's in their contract. this kind of

they're both bde firms as they lead the leed consultant firm. cd is obviously a team that has been around for a

trying to do here is put not just steve cohen the firm but the individual out of business here. it's very doubtful that he might have the money left to run a family office beyond what all of us can do -- >> that's an interesting point. you're saying let's say he has 8 billion dleleft. you're saying they might be able to prove to all that far monof was forged through criminal activity and he might have to give that up? >> he is the operator of a criminal enterprise. presumably, yes, they may go after everything. >> there has to be a statute of limitations. if he made billions of dollars ten years ago, it can't go back to that. >> they're looking at a ten-year period. they're saying this is a continuing, ongoing thing. the statute of limitations, if they have one trade within the statute of limitations, they can go back. but i agree with scott. i think steve cohen will not going to trade anything. i think he'll spend the next days, the next year or two, in his lawyer's office, going through e-mails, trying to explain conversations. i think he's done as a trader and i think they're

treating it is the brokerage firms so their beef f penny is with the brokerage firm that should have told them to stay away. it is an interesting dynamic and as you know, most players have taken the settlement even if the investors lost money but that is a tougher case with the investors. we care about small investors but it is clear that nasdaq tries to put the argument together to say there is no case. liz: look at the intraday stock. it is not gigantic but the nasdaq stock is starting to move beyond it has been down over half a cent i am saree now is down 1/3 of a percent >> i am not a lawyer. i talk to them every day unfortunately but these seem like compelling arguments. if you are a small investor review by a stock's is the nasdaq or any exchange responsible for a scrap? today owe you many? are there countervailing arguments? maybe your broker should have said don't buy the stock or walk away. as a matter of law you do not deal with the nasdaq but the intermediary that tells you to buy or sell or you make your own decision but your beef is not with us. as self-regulatory they a

kate kemly is here with the details on what's going on inside the firm. kate. >> scott, sac is trying to maintain a situation normal mentality when things are anything but. since the night before the firm was indicted for alleged insider trading last week, founder steve cohen and the firm's president held a couple of calls and sent memos to staff urging them to hang in there and not be cowed by peer pressure or family pressure to leave the firm which believes it is not guilty. staffers expect to see some departures as they prepare for the possibility of it turning into a family office running just steve cohen's money or decide they can't handle the pressure of being shut down by the government but sac lawyers are forging ahead on a protective order with prosecutors that would ring fence a large part of the prote. that would enable to give brokers and parties confidence that the assets are safe. goldman sachs, morgan stanley and credit suisse appear to be standing by them for now and s.a.c.'s deal documents with them, i'm told, provide a little more wiggle

back if the firm has to close the doors. the story broke down instantly about charges as heavy and frightening as these. i'm less worried about this one. sac has never been addicted to debt. you may ask why the firm is being indicted. if his namesake firm is the alleged perpetrator of these crimes. some say, it happened because they could not nail cohen, they had nothing on him. no one has flipped against the man they work for, so we have to take action anyway, we can not let cohen get away with it. to me the government is saying, look, cohen recruited people who had a edge, a legal edge, people who knew more than you do, and people who were meant to find out things that you couldn't. information about all the stocks and many others. he mentioned this culture specifically today. >> today's indictment is not just a narrative of names and numbers, it is more broadly an account of a firm with zero tolerance for low returns but seemingly tremendous tolerance for questionable conduct. >> wow. the indictment then alleges that cohe

if the firm has to close the doors. the story broke down instantly about charges as heavy and frightening as these. i'm less worried about this one. sac has never been addicted to debt. you may ask why the firm is being indicted. if his name sake firm is the perpetrator of the crime. some say, it happened because they could not nail cohen, they nothing on him. no one has flipped against the men they work for, so with we have to take action anyway, we can not let cohen get away with it. to me the government is saying, look, call in recruited people had a edge, a legal edge, people who knew more than you do, and people who were meant to find out things that you did not. information about all the stocks and many others. this culture specifically was mentioned today. >> today's indictment is not just a narrative of names and numbers, it is more broadly, an account of affirm with zero tolerance for low returns. but seemingly tremendous tolerance for questionable conduct. >> wow. the indictment then alleges that coh event n p

here, they ran a picture of the firm they used to value the acquisition. i've learned not to judge a book by its cover, but the picture they have of this accounting firm does not look like somebody that jeffrey tate would be u using. i can tell you with full assurance that we had two u.s.-based accounting firms, who brazilian operations participated in this acquisition and audited not only this deal, but a full set of financial space. we used another of the big four firms to do the purchase accounting in brazil. their work was checked as well and we feel we got the best in the industry and the best in the world working with us on a professional basis. >> i don't think that's the way it's building. how about this one? ceo's consistent sales he receives, just a lack of faith in sceustainability of the business. ironically, this is a vu we share with him. >> that's again wildly inaccurate. short of a misperception of narrow pieces of information about my stock position. i've got two-thirds or more of my net worth in the stock. as many ceos do, just the sort o

a big article in the new republic today about the end of the golden age for the big american law firm. two things to talk about, and we have the editor at "above the law" and cnbc.com net net editor john carney, both former lawyers and both know each other very well so nice to reunite you guys on tv. >> good to see you. >> nice to see you, john. >> john, let me start with you. the revolving door. we've known that it's been in existence for a long time. >> look. i don't think this is as big of a deal as people think. there's been studies that actually looked at whether s.e.c. guys who later on go in to work for the big wall street law firms, whether they are easier or harder on the companies that they end up representing, and they are not easier, as it turns out and actually probably a very good reason for this, because if the s.e.c. is tough on these firms, and on these financial companies that they end up representing, then they have to hire these guys. so in a weird way it might actually be a benefit that these guys end up going to work for them because they have an incentive to mak