Idiocracy comes to life…

images1.jpegA few months ago, I saw the movie Idiocracy and can’t seem to get one of the signature lines, “Ow, my balls,” out of my head. In the movie, that line is the plot-line of the most popular television show in the future. Indeed, whenever my husband and I see someone doing something stupid, we often turn to each other and say exactly that. If you haven’t seen the movie yet — it was not in wide release or even previewed or promoted, perhaps because of its dark message about how we’re all getting stupider in part due to our choices in entertainment — it’s definitely worth checking out.

I mention this because last night, after reading this press release about insider trading in advance of the $32 billion deal to take TXU (TXU) private, the first thing I said to myself was, “Ow, my balls”. According to the SEC, now former Credit Suisse (CS) investment banker Hafiz Naseem tipped off a banker in Pakistan — and here’s the Idiocracy part — by calling the guy from his office phone at Credit Suisse. You can almost imagine Naseem thinking, “Hey, this is a big company. They can’t possibly track my phone calls.” According to this Bloomberg story, Naseem faces as many as 20 years in prison and fines of as much as $125 million. According to the complaint, Naseem didn’t just stop at TXU. He also tipped on a bunch of other deals that Credit Suisse was involved with, including First Data Corp. (FDC), Jacuzzi (JJZ), and Caremark Rx (CMX).

With merger activity continuing to rise — today there’s talk of both Yahoo (YHOO) and Reuters (RTRSY) being acquired — investors, especially those of us who enjoy trying to find these things in advance — need to know that there’s not a bunch of investment bankers and attorneys trying to game the system. While the SEC hasn’t found whomever profited — massively — from the Dow Jones (DJ) news the other day, there’s a fair number of us who hope that day comes soon. After all, sometimes making an example of someone really does serve as a deterrent.