David Einhorn photo

The saga over David Einhorn’s Greenlight Capital’s “market abuse” seems to not be over. According to Wall Street Journa lThe Financial Securities Agency (FSA) has now fined the former compliance officer at Greenlight, Alexander Ten-Holter, for “insufficent oversight.”  It seems strange to fine an individual instead of the firm itself. Furthermore, no fines have been levied at other high Greenlight officials, such as Daniel Roitman the COO. Likely if Einhorn knew about the sale so did other high ranking officials at the firm.

Finally, we find it odd that the FSA is now announcing the fine, since the investigation is over two and a half years old. When the FSA announced the fines against Greenlight earlier this week, why did it not fine Ten-Holter then? why was the announcement just made today? This makes us highly suspect that the FSA is playing politics and is upset at Einhorn for publicly challenging their authority. The trader, who Einhorn mentioned in the call was also fined today.

We noted in a  recent article that the SEC had an agenda for targeting hedge funds and not banks:

So, why are the feds going after hedge funds if not to signal that there will be seriousness penalties for corruption?  And why not focus on the Bernie Madoff and Jon Corzine ilk, which involve billions in missing investor money?

The answer is simple (and twofold).  It’s good PR; and hedge fund victories provide a temporary (but satisfying-enough) distraction from what many Americans wish the authorities would focus on instead: the banks.

It appears the FSA is taking one from the SEC’s playbook here.