William Cohan vs. Andrew Maguire - Some Thoughts
The best way to start this is to reference a post on tfmr from longtime contributor, Murphy, who posted this question from an article by JS Kim http://archive.aweber.com/sku_newsletter/P8OoD/h/The_Silver_Manipulation.htm:
“What do you think is going on in this dispute between Naylor-Leland/Maguire/Schnell and Cohan in which each party is accusing the other of killing the silver manipulation story?”
So, let us dig in a bit and hone our analysis, and try to reason to some sort of conclusion.
First, Mr. TF issued a call to arms, here, http://www.tfmetalsreport.com/blog/6157/time-take-action, asking readers to implore that the silver manipulation story, apparently well-researched and well-written, by William Cohan : http://en.wikipedia.org/wiki/William_D._Cohan be published:
“Per Ned's request yesterday, PLEASE take a moment to review the contact information for Mr. Cohan that is listed below. Then, pick a venue and drop him a line. PLEASE be responsible, polite and courteous. However, PLEASE feel free to demand that Mr. Cohan make every effort to see his article published as soon as possible.”
Following that was an excellent interview of Mr. Cohan, by none other than Dr. Dave Janda, here, http://www.tfmetalsreport.com/podcast/6169/william-cohan-dr-janda. Mr. TF summarized the interview, as follows:
“The 25-minute interview is wide-ranging and very interesting. Cohan was open and forthright while he discussed several items of interest including:
Cohan's interpretation of the evidence that Andrew Maguire presented to him;
Former CFTC commissioner Bart Chilton told Cohan directly that he thought the silver market was manipulated; and
After the CFTC closed it's investigation, Andrew Maguire took the material to two other government agencies but both agencies declined to investigate further Cohan shopped his completed article to two mainstream media outlets, both of which declined to run it;
Cohan has offered to take the story to ZeroHedge to get it published but Andy and his attorneys have yet to give him authorization to do it.”
Then, our good friend, the brilliant, Ned Naylor-Leyland, who speaks with a strange accent, weighed in with his comments, which Mr. TF so graciously provided us in Mr. TF’s post, here, http://www.tfmetalsreport.com/blog/6176/andrew-maguire-responds-cohan-interview
“Cohan wants to insert language that directly names the TBTF bank at the heart of the manipulation (which, I guess, we all assume to be JP Morgan). Andrew and his attorneys allege that, at this stage, directly identifying the lead perpetrator would be potentially libelous and, thus, was never agreed to by Andrew and his lawyers.”
While all this fun merriment was occurring, naturally, I was nowhere to be found, buried in legal work with an upcoming trial starting in a few weeks. Hey, someone has to contribute to GDP!?
So, as I missed the show, and this fascinating, real-time drama, naturally, many folks here wondered what I thought, and asked me to weigh in, which I am most happy to do.
I will not rehash everything, though. What I will do is provide a bit of insight [I am a litigation attorney, and I work on wrongful termination cases all the time], and look at things from an incentive-based reasoning structure.
Understand that in any termination of employment situation, there exists the possibility for litigation. The employer may sue the terminated employee, fearing theft of trade secrets. Likewise, the fired employee may sue the employer, for a whole host of reasons, including wrongful termination, etc. In larger companies, the termination of a senior employee, or of an employee making significant compensation, the terminations are usually negotiated matters. The stakes are just too high in litigation, so neither the employee nor the employer want to risk an expensive, time consuming lawsuit down the road. So, both the employer, and the employee, reduce the termination terms and conditions to writing. There is a severance package, including terms of compensation, and possibly some form of non-compete condition, and as well, an anti-disparagement clause, prohibiting the terminated employee from bad-mouthing the former employer, and vice-versa. They always, always, without exception, include a confidentially clause, as well. This type of agreement is very standard.
In every single one of these that I have ever worked on, I have never seen it where the now terminated employee, who is offered a sizable severance package, refused the deal because the terminated employee demands that the severance agreement contain NO confidentiality provision. In short, the terminated employee takes a big chunk of money, and agrees to be silent as to the anything about the former company, terms and conditions of employment, etc. The punishment for breaking that agreement, [in lawyer speak, stated as “breaching the confidentiality provision”], is varied, but almost always includes a liquidated damages provision, with an added requirement that the confidentiality-breaking, fired employee must indemnify the employer for any consequences of the breach of confidentiality.
See? Clear as mud.
Really, it is quite simple. The employer basically tells the fired employee: look here, you are fired. Sign off on this agreement, and you get this fat wad of cash. Oh yeah, and you can’t ever talk about us ever again. If you do, you owe us the money back, plus $250,000 for every breach of confidentiality we prove, and if we get sued or have enforcement taken against us, you have to pay our legal bills.
Understand, too, that the terminated employee has no bargaining power, and cannot really say no.
I have recommend to plenty of potential clients, who come to me as they are contemplating whether to take the severance deal, or sue the company, and ask my advice. In every case, I tell them to take the money, because that is guaranteed, but my success at trial is not. Some end up suing, some don’t. The ones that take the money simply go quietly off into the night, never to rise up and speak out about the bad things that happened at the former company. I have seen this time and time again.
So, let’s now focus on the Cohan v. Maguire battle.
“After graduating from Duke University in 1981, he was an investigative reporter for the Raleigh Times and won several awards. He then worked on Wall Street for seventeen years as a mergers and acquisitions banker. He spent six years at Lazard Frères in New York, then Merrill Lynch & Co., and later became a managing director at JP Morgan Chase. He also worked for two years at GE Capital. Cohan is a graduate of Duke University, Columbia University School of Journalism, and Columbia University Graduate School of Business.”
We know William Cohan never worked for Goldman Sachs, and we know, from Cohan’s own mouth from an interview three years ago, that Cohan, as a Wall Street Insider, was a staunch competitor against Goldman Sachs for years http://thedianerehmshow.org/shows/2011-05-24/william-cohan-money-and-power/transcript:
“No, I never worked for Goldman Sachs. I competed against Goldman Sachs. I worked with Goldman on deals. I lost business to Goldman Sachs. I won business from Goldman Sachs. You know, no matter what firm I worked on on Wall Street, and I worked at four different firms, we all wanted to be like Goldman Sachs. We all wanted to emulate Goldman Sachs. Goldman Sachs still is the most admired firm on Wall Street for its brains, for its brawn, for its audacity and for its aggressiveness. Goldman is sort of like IBM used to be in the olden days when you could not go wrong hiring IBM to design your computer systems. You couldn't go wrong hiring Goldman Sachs to underwrite your securities or to advise you on an M & A deal. Obviously, some of the bloom is off the rose.”
We know that JPM fired Cohan in 2004:
“I was fired because it was after 9/11 and the firm that I worked for at the time had just gone through a big merger, the merger of J.P. Morgan and Chase. And when they put this merger together which closed at the beginning of 2001, they had these grandiose plans about how much business the firms combined were going to do and how many people they needed for that.
Well, after 9/11, the business on Wall Street dropped off a cliff and they began a series of massive layoffs. And finally in January of 2004, my number came up and it was time for me to go. It was either, you know, one Bill Cohan or 25 young associates and analysts and I think that became an easy decision.”
And, we know that Cohan wrote a book all about how corrupt, and too big too fail Goldman Sachs really is. http://thedianerehmshow.org/shows/2011-05-24/william-cohan-money-and-power
Based on my research of Cohan, I do not believe for one second that Cohan is disloyal to the firm that made him a Managing Director, despite the fact that they fired him. Cohan wrote a book blasting Goldman Sachs, not JPM. Why is that? There can be but one conclusion for that fact. Cohan has no love for Goldman Sachs, and perhaps, despite getting fired by JPM, perhaps he feels loyalty towards JPM, not unlike college football fanatics, even as grown adults, still harbor deep resentment towards their alma mater’s rivals [hey TF, Big Red fanatic, how are the Sooners doing, or the KSU Wildcats?]. See?
So, can we reason to an incentive structure in place that perhaps is motivating Cohan to want to write an article about silver manipulation, (1) without identifying which major player is actively doing the manipulation, (2) which simultaneously discredits criticisms of JPM and places blame upon Goldman Sachs [or others] for market manipulations, and (3) which allows Cohan to avoid getting sued by JPM for violating the terms of a severance agreement between Cohan and JPM containing confidentiality provisions? Umm, to use my best Bugs Bunny voice, “could be!”
So, does it seem to explain the fact of Cohan writing the article, but not really wanting it to get published, all while dangling the implied assertions that manipulation is occurring by a too big to fail bankster, who we will all conclude is JPM, or possibly Goldman Sachs?
What about Andrew Maguire and his incentive structure? Is there one bit of evidence suggesting anything but honest motives by Mr. Maguire in risking personal health, lawyering up, relentlessly proffering reams of evidence to all who will listen, trying constantly to shine the light of truth upon the corrupt market manipulation of the gold and silver futures markets? My opinion is straightforward. Andrew Maguire is one of the good guys, his actions have been consistent with his desire to shine truth onto the corrupt Comex, et al., and now, here is Cohan, casting aspersions and making nonsensical challenges about easily disproved things.
Finally, there is the angle that many of the brilliant turdites figured out, that perhaps Cohan is timidly avoiding stating JPM is the manipulator due to his fear of being sued for defamation.
As you all know, defamation is a non-contractual civil wrong, which places monetary liability upon one who makes a false statement of fact, that injures another. Opinions are not defamation. So, if Cohan had said something like “I don’t know whether the manipulator is JPM, but I am offering only my opinion that it may be them,” that is far different than a statement of fact that “JPM is manipulating the futures markets.”
Truth is an absolute defense to any defamation lawsuit, but the costs to defend against a defamation lawsuit can reach well into the six figures, depending upon the nature of the lawsuit, and who is doing the suing. Since JPM has unlimited fiat available to it, and since high priced lawyers are all over the place like cockroaches, even if one is telling the truth, the costs to prove it may be excessive.
Another possibility, is that in a lawsuit for defamation, Cohan could defend based on the truth, which would open up JPM to discovery. That means Cohan could take depositions, get documents, and dig real deep into the innards of JPM and actually uncover such manipulation.
With that said, surely, if he was truly motivated to tell the truth that JPM is the manipulator, and since he wrote the article, including sourcing documents and facts, then Cohan should have zero concern of liability, and should relish the opportunity to bring to light the sensational story of our times. Cohan would be world renowned, of Bernstein and Woodward-type fame, or Matt Drudge fame, and since he is a publicity hound, then a simple threat of a defamation lawsuit could not possibly be a deterrent.
There is finally, the real likelihood that Cohan is afraid of personal harm if he points out that JPM is the manipulator, doing the US Fed’s dirty work for the plunge protection team. Cohan would last one minute, then he would accidentally shoot himself with a nail gun in the head seven times . . .
What about Maguire? Has he shown anything but constant effort to point out the truth?
There are others who dislike them both, figuring they have incentives, to talk their books. Oh well, that may be the case as well, but I do not find that opinion persuasive.
I hope that gives a little more sustenance to this story. I’m not going to put too much more effort into all of this, though, as there are two things of a more pressing concern:
(1) Acquiring as much silver as I can before we lose the 17 handle [I missed the 16 handle altogether, damn!]
(2) Building preps for what is SURE to be a fascinating fourth quarter.
You know how this ends,