Who’s behind the big changes to the Department of Labor lock-up rules?

This post is delayed. Please check back later.

Update 10:30 April 17: The promised audio of Monday’s call, which was supposed to be posted to the DOL website yesterday, is still not available. The DOL linked it earlier, but the recording turned out to be muzak and now it’s disappeared.

Honestly, if they can’t upload an MP3 file, it doesn’t bode well for a smooth technical release of BLS data when the time comes.

Update 11:00 April 17: Ok, I’m posting even though the audio isn’t up yet. I’ll fix the link once it goes up.

Update 11:45 April 17: Link is fixed.

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As promised, I phoned into the U.S. Department of Labor’s briefing on the new lock-up rules. The DOL’s Senior Advisor for Communications and Public Affairs Carl Fillichio said at the very beginning of the call that it was not a press briefing and for planning purposes only, but the audio is now publicly available on the internet for anyone to listen to so I am going to go ahead and treat it as a public  briefing since, under the circumstances, that’s the only strategy that makes sense. There’s absolutely no logical reason why I shouldn’t be able to report on the call.

After listening to the briefing what struck me most was that these are huge changes for a bureaucracy. All the news organizations that currently attend the lock-up must remove their equipment and private communications lines on June 14th and 15th. Going forward, they will use government-owned and maintained  equipment and data and telephone lines. This poses a huge technical issue for many of the news organizations.

Some of the reporters for the big financial news agencies expressed concerns that the new systems and rules would lead to “uneven and unfair release of data.” One reporter asked if the DOL no longer cares about the orderly dissemination of data or just that nothing ever leaks.

As far as I could tell, there was contradictory information given on how the technical release of the data will happen. In answer to his question, one reporter was told that journalists in the lock-up will be able to transmit HTML files using a Win/ FTP client, but then an official for the Bureau of Labor Statistics said all information would be released in Word documents that will be transferred at precisely 8:30 a.m. after which news agencies will have to “get it efficiently” into their own systems.

I’ll admit that I don’t have enough technical knowledge to evaluate whether the first situation could work effectively.  (Maybe some of my helpful anonymous sources will be good enough to chime in in the comments or send me an email at ann.brocklehurst@gmail.com.) But the second option outlined by the BLS official sounds like crazy talk to me. If everyone’s left having to deal with Word documents at 8:30 a.m. on July 6, when the new lock-up rules go into effect, it’s going to be complete freaking chaos, especially if the numbers are big news, which they well might be — both for traders and politicians.

I have to say, I wasn’t impressed with some of the officials’ lack of knowledge, but that could be because the people who did the talking during the call aren’t the ones who have the actual technical know-how.

What did strike me when it was all over is that someone very high up must have asked for these changes because this is not the type of thing bureaucrats do by choice. And that means some very powerful people must be unhappy with what’s been going on in lock-ups for the past few years and have decided it needs to be fixed NOW.

It’s difficult to believe that they would be this upset if it were just a few pipsqueak players like Need to Know News (NTKN)RTTNewsPotomac Radio News and the now-defunct CEP News involved. If that were the case, surely the solution would have been to just kick the problem organizations out.

When asked about the reasons for the changes by various different reporters, Fillichio repeatedly declined to comment. All he said was that “the world has changed” in the 10 years since lock-up procedures were last thoroughly reviewed and that it was a “prudent business decision” to implement new procedures. “There’s no current problem,” he said. “I’m trying to prevent a problem.”

So, what problem is it that he’s trying to prevent and who’s pulling the strings? Who demanded this be fixed now after a known and documented problem hass been allowed to persist for years? And why are the names of the two different news organizations who have broken lock-up rules in the past two years being kept secret?

As always, you can reach me at ann.brocklehurst@gmail.com. No theory is too wild to entertain.

Background info: In about 2006, Need to Know News (NTKN) was admitted to DOL lock-ups despite well-known rumours that it was not strictly a news agency and that it was tied to JED Capital, a Chicago proprietary trading firm.

CEP News arrived on the scene in 2007. Backed by the Montreal prop trader/hedge fund Vigilant Futures (now Vigilant Global), it concealed some of its sources of funding. It was temporarily admitted to lock-ups in Washington and London by hiring reporters who already had valid press credentials.

RTTNews, which was recently accredited by the DOL to attend lock-ups after Potomac Radio News closed up shop and its reporter Michael Duncan left town for the midwest.

 

Where does Jump Trading fit into the picture?

This is an interesting story on Jump Trading, which has a long-standing interest in my website.

Visits by Jump Trading to AnnBrocklehurst.com

What people from Jump Trading are searching for

Jump’s co-founder Paul Gurinas is also named in the Shirley vs. Jed Capital and Harada court case. As a previous business partner of John Harada, he may very well have insights into NTKN’s operations and the advantages it provided to Jed Capital.

Shirley v. Jed Capital and John Harada: An Update on the lawsuit

This case promises to offer interesting insights on the relationship between strange news agencies and proprietary trading firms, but, wow!, has it ever been taking a long time to get the information out. So, given that justice seems to be delayed, here are some court documents to tide you all over until next month’s hearing. (Discovery to be completed by 4/13/2012. Status hearing by telephone set for 4/18/2012 at 8:45 a.m.) First off, it seems that since I last posted documents, Jed Capital has countersued Christopher Shirley and his brother, John Shirley. Here’s the Counter-Defendants’ Answer to the Counterclaim and Third-Party Complaint to get things started: Shirley v. Jed Capital and John Harada: An Update More documents to come…

March 10, 2012

Here are the witnesses as named in a document filed on February 4, 2011: The Plaintiff, Christopher Shirley, in the above entitled matter files this document in compliance with the initial disclosure requirements of Local Rule 26.

I. WITNESSES KNOWN TO PLAINTIFF AT THIS TIME: A. Christopher Shirley Mr. Shirley is the Plaintiff in this matter and will provide testimony relevant to allegations of the Complaint, Answer, Affirmative Defenses and Counterclaims. B. David Oosterbaan  Mr. Oosterbaan will testify concerning the finances of Jed Capital; payment of expenses; the financial relationship between Jed and Need to Know News (NTKN). Mr Oosterbaan will also testify concerning the London Stock Exchange and ISO Projects. Mr Oosterbaan will also testify concerning Plaintiff’s ongoing complaints concerning lack of resources and internal charges. C. Michael Pelech Mr. Pelech will testify concerning his authority and responsibility as a manager of JED. Mr. Pelech will testify concerning the management of JED by John Harada and will further provide information concerning the financial aspects of Plaintiff’s investment in JED. Mr. Pelech will also testify concerning the relationship between JED and NTKN. D. Christopher Keating Mr. Keating will testify that Christopher Shirley and John Shirley did not and were unable to sabotage the JED software. He will further testify concerning the relationship between JED and NTKN. E. Madala Rao Mr. Rao was a member of JED and an employee. His employment was terminated. Mr. Rao will testify concerning the relationship between JED and NTKN. F. David Berger Mr. Berger will testify concerning the fact that he was on the JED payroll but never worked for JED. It is anticipated that he will testify that he worked for NTKN. G. Jeff Gomberg Mr. Gomberg was a partner of EV. EV had a business relationship with JED. EV filed suit against JED alleging mismanagement of JED. H. Ben Jackman Mr. Jackman was a partner of EV Financial Systems. EV had a business relationship with JED. EV filed suit against JED alleging mismanagement of JED. I. Paul Horak Mr. Horak will testify concerning the use and management of the LRP Program subsequent to August, 2009. J. Pedro Espinoza Mr. Espinosa was an employee of JED. He was a system operator of the LRP Program and will testify concerning the mechanics of the LRP operation. K. Vlad (Last name is not known at this time.) This witness (Vlad Pasman?) will testify as to the operations of JED and the relationship between JED and NTKN. L. Mark Lupei Mr. Lupei was the accountant for JED. He will testify concerning the finances and financial records of JED Capital. M. John Harada Mr. Harada will testify in his own defense. N. John Shirley Mr. Shirley will testify that the allegations of the Counterclaims are false. O. Kenneth Alpart From Harrison Trading. Mr. Alpart is a previous business partner of Mr. Harada. P. Doug Gerard From Harrison Trading. Mr. Gerard is a previous business partner of Mr. Harada. Q. Elrick Williams From Allston Trading. Mr. Williams is a previous business partner of Mr. Harada. R. Robert Jordan From Allston Trading. Mr. Jordan is a previous business partner of Mr. Harada. S. William DiSomma From Jump Trading. Mr. DiSomma is a previous business partner of Mr. Harada. T. Paul Gurinas From Jump Trading. Mr. Gurinas is a previous business partner of Mr. Harada. U. Eddie Linker From JED Capital. Mr. Linker was a partner when JED was formed. V. Doyle Olsen From Maverick Trading. Mr. Olsen managed Maverick Trading while Plaintiff was employed there. W. Clint Rhea From Maverick Tracing. Mr. Rhea worked at Maverick Trading and later worked with Mr. Harada and NTKN. X. Erik Strom Mr. Strom was my employer at SG Cap Trading. Y. Robert Nawrocki Mr. Nawrocki entered into a business relationship with Mr. Harada that went sour. Mr. Harada continued the project without including Mr. Nawrocki.

Bloomberg requests information on Need to Know News (NTKN)

Here’s a link to documents from 2008, released under the Freedom of Information act, showing Bloomberg News staff requesting information about NTKN. Bloomberg editors, whose names were given to me by other sources, have never returned my calls and emails about the NTKN/CEP situation.

This document doesn’t reveal much other than the fact that government agencies have a big black marker budget. The relevant pages are 92, 93, 96 -100.

The Mary Beth referred to is Mary Beth Slack, trader turned NTKN bureau chief.

Here’s some information B5 exemptions under the FOIA.