Freshman Florida Representative Alan Grayson has emerged as something of a hero to those fed up with the endless bailouts and Wall Street’s perceived capture of government.
Turns out, the Financial Services Committeemember had a personal brush with financial crimes that he never disclosed before.
Roll Call: Freshman Rep. Alan Grayson (D-Fla.) lost $3 million in a stock swindle between 2000 and 2005, a Florida television station reported this week.
According to Orlando’s Local 6, Grayson was an investor in a Ponzi scheme run by the company Derivium Capital. The scheme allowed Grayson and other investors to turn over stock to Derivium in exchange for cash loans and redeem the value later if the stock prices increased.
The station cited court filings indicating that Grayson transferred about $29 million in stock to the fund, taking out about $26 million in cash. A South Carolina court ruled earlier this year that Derivium shareholders were owed about $270 million in lost profits and that Grayson’s share of that would be about $34 million.
Does it matter that a Representative who sits on this committee got swindled like this and never said anything? Obviously some conservatives (Grayson is a Democrat) are taking some shots at him. We’d like to know a little more about Derivium and whether its offer really should have looked too good to be true.
Either way, there’s generally a more worrying trend of politicians having really odd, totally mis-allocated investment portfolios. They’ll own some inordinate amount of one company. Or they’ll hold lots of treasuries, and then a few shares of some tiny penny stocks they got into. You see it over and over again. It’s not whether there are crimes going on, or whether they’ve been swindled that’s the issue. It’s that the people regulating this industry often haven’t shown much personal common sense.
It’s common for a reporter during a campaign to ask a politician how much a “gallon of milk” costs as a test to see whether they’re a common guy that goes to the grocery store themselves. Perhaps some questions like: What’s a reasonable annual fee for an index fund, or how much does a typical online stock trade cost, or what’s the 10-year bond yield would be better questions. Besides, what if you (like us) don’t drink milk?
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