SAC Capital Indicted on Criminal Fraud Charges
The Federal government released a 41-page criminal indictment of SAC Capital, one of the largest hedge funds in the United States. In the indictment, the culmination of an decade-long FBI investigation, prosecutors describe a profitable insider trading scheme that lasted from 1999 to 2010, in which SAC employees used external sources for insights about quarterly returns, mergers, and acquisitions.
U.S. Attorney Preet Bhahara did not rule out bringing criminal charges against SAC Capital founder Steven Cohen himself, who already faces civil charges from the SEC. Whether or not Cohen faces criminal charges, his $15 billion firm and reputation are likely to be dealt a massive blow; according to The Wall Street Journal, no major financial firm has ever survived a criminal indictment.
House Votes Down Amendment to Limit NSA Surveillance
On Wednesday evening, the House of Representatives voted down Rep. Justin Amash (R-MI)’s amendment to the defense appropriations bill, which would have defunded the NSA’s broad surveillance program, by a vote of 205-217. Among the Republicans defending the Obama administration’s broad surveillance power was Michele Bachmann (R-MN), who argued that if the program were to be defunded, “it will be those who are seeking to achieve the goals of Islamic jihad who will benefit by putting the United States at risk.”
Before the vote on the House floor, the White House urged Representatives to oppose the amendment, arguing that a “blunt approach is not the product of an informed, open, or deliberative process.”
80+ Dead in Spanish High-Speed Rail Accident
Over 80 passengers died in a Spanish high-speed rail accident on Wednesday. Spain’s judicial authorities and Public Works Ministry have launched independent investigations into the crash, but early reports indicate that the train was taking a curve at more than twice the speed limit. The driver, who left the crash with minor injuries, is under investigation by the judicial authorities.
Spanish Prime Minister Mariano Rajoy declared that Spain would observe a three-day mourning period, adding, “For a native of Santiago, like me, this is the saddest day.”
Holder to Petition Court to Reinstate Texas Preclearance Requirement
At the National Urban League Conference in Philadelphia, U.S. Attorney General Eric Holder announced that the Justice Department plans to petition a court to require Texas to receive federal approval to changes in its voting procedures. If this petition were to succeed, it would have the net effect of reinstating the recently-overturned preclearance requirement of the Voting Rights Act in Texas. He claimed that the Justice Department had a responsibility “to ensure that the voting rights of all citizens are protected.”
In response to Holder’s remarks, Lamar Smith, a Republican Representative from Texas, said, “The Supreme Court message to the Justice Department was clear – don’t mess with Texas.” States are likely to challenge the Justice Department’s interpretation of their role in the enforcement of the Voting Rights Act without Congress’s explicit approval to require state-by-state preclearance.