Meredith Attwell Baker Proves Not All Insiders Go to Jail
This summer, Raj Rajaratnam will stand before Judge Richard Holwell and receive his sentence for insider trading. If the experts are right, he'll hear a number somewhere in the “15 to 20 years” range.
Around the same time, Meredith Attwell Baker will be in a nice, cushy office — and nowhere near the inside of a federal prison.
Baker will actually be in her second month on the job as senior vice president for government affairs for NBC Universal — a segment of Comcast. Baker is one of four Federal Communications Commission members who,earlier this year, approved the controversial merger between Comcast and NBC.
In other words, Baker will resign her position at the FCC to take her new position with the company whose merger she just approved. How convenient for her.
The difference between Rajaratnam's and Baker's situations is not as clear cut, ethically, as it seems. Yes, Rajaratnam has been found guilty of violating insider trading laws, while Baker has not and will not be charged with any crimes. But is what Rajaratnam did really worth two decades in jail while what Baker did is shrugged off as the way things work?
In Rajaratnam's case, his connections gave him very good information from which to make trades. The government contended that the information he received was “insider information,” meaning it was not available to the public and gave him an advantage over other traders. Rajaratnam's defense team contended that the information he received was publicly known, and other people could have done what he did.
In other words, rightly or wrongly, he profited directly from his intimate knowledge of the situation at hand.
Isn't that exactly what Baker did and how she landed this job? When it comes to NBC Universal and Comcast, she is the ultimate insider, and this is the ultimate trade — her access to government in exchange for a nice salary.
Would she have voted for the merger, even absent any potential job opportunities? Probably. Her previous statements about mergers shows that she is friendly to the corporate side of any argument. Even though Baker says she was not approached about the job offer before the merger was approved, the timing of this move sure gives the appearance of impropriety.
Raj? Prison. Baker? Corporate Headquarters. I guess when it comes time to be an insider, pick your trades wisely.
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