Justice Served Up Daily

Rikers Island

Justice Served Up August 3, 2012

Anthony Scolaro Leaving Courthouse in ManhattanFormer Diamondback Manager Gets Probation (Forbes) - Anthony Scolaro received a hot stock tip from a friend, healthcare portfolio manager Franz Tudor, that Axcan was going to be taken over by a private equity firm in 2007.  Two years later, the FBI stopped Scolaro and asked "sup with that".  Scolaro soon began cooperation with the FBI and recorded conversations of other friends in the business.  Now the feds are chasing and cuffing those guys while Scolaro goes home to his wife and kids.  The judge gave him 3 years probation.

Insider Trader Arrested at Bristol-Myers (Bloomberg) - Robert Ramnarine, a Bristol Myers Squibb executive, was arrested yesterday for making over $300,000 on trades based on information made available to him as a company insider (not publicly available).  On some of the projects he worked on for the company he was asked to evaluate the capital structure impact that the acquisition would have on the company .... he then went out and bought shares of the company that BMY was looking to acquire.   One Google search Ramnarine did from his office was, "can stock option be traced to purchase inside trading."  This past July Ramarine was promoted to assistant treasurer for capital markets at BMY.

Private Prisons Cash In on Illegal Immigrant Incarceration (FOX News) - One growing profit center for Corrections Corporation of American and GEO, the two largest private prison companies in the U.S.,  is the mass incarceration of illegals that are awaiting deportation.  The Federal Bureau of Prisons signed contracts of varying lengths with private prison companies for $5.1 billion to hold more than 23,000 criminal immigrants.  In GEO's 2011 3rd quarter earnings call, CFO Brian Evans told investors "Another factor driving growth ... for the private sector is in the area of immigration and illegal immigration specifically."

Goldman Sachs Invests in Reducing Prison Recidivism (NY Times) - Making money doing things that benefit society is to be applauded.  New York is experimenting with "social impact bonds".  Under the plan Goldman Sachs will provide $9.6 million loan to pay for a new 4-year program intended to reduce the rate at which adolescent men incarcerated at Rikers Island reoffend after their release.  Through a social services provider that will oversee training of inmates, if recidivism falls by 10% then Goldman will be repaid its $9.6 million loan ... if something less then it will lose as much as $2.4 million.  The hope is to let the private sector do something more than just profit from incarceration (see article above).


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