Couple of stories have come up here recently about insider trading from an investment banker at CSFB to two sets of dynamic duo husband and wife teams – one at Morgan Stanley and the other in Hong Kong.

So, after Sarbanes-Oxley was suppose to make it all better while heaping loads of compliance costs on companies.  After the major Wall Street firms ponied up $1.4 billion to settle conflict of interest charges.  After new procedures, technologies, and staff were added to increase compliance and oversight.

Some guy at a bulge bracket firm on the deal team can make undetected phone calls to a residence and mobile phone in Pakistan from his office phone and a compliance officer at Morgan Stanley can be in on a separate scheme.

Fabulous. 

Good thing they are saving all those emails for years and have armies of people deployed to run NASD 3010 mandated 5% samples on email correspondence because that seems to really be helping.

Maybe it is a good thing that folks are getting caught albeit after the fact.  The SEC seems to be able to identify suspicious options trading volume or that an $8MM pay day is a bit out of the norm.

At least Spitzer got elected Governor and we get to see a sequel to Wall Street.