As Clinton pardons went, this one wasn’t so bad. I mean, Edward R. Downe, Jr. wasn’t a PR terrorist and didn’t kill anyone, for heaven’s sake – at least he didn’t do that. He did trade on inside information and, even though he was Henry Ford II’s son-in-law and a director of Bear Stearnes and probably didn’t need the money, pocketed $23 million. I guess those types never can have too much money and Chris Dodd must agree because when the SEC demanded that Downe return fifty cents on the dollar of what he’d stolen Dodd got a pardon for his friend in the waning days of the Cliton administration. Oh! And a nice house in Ireland. Sounds like a deal to me.
From the New York Times (1992)
After a four-year investigation, the Securities and Exchange Commission filed insider trading charges yesterday against seven corporate executives and investors, including Edward R. Downe Jr., a former director of Bear, Stearns & Company and the husband of the automobile heiress Charlotte Ford.
Also charged were Martin E. Revson, co-founder of the Revlon cosmetics empire; Steven A. Greenberg, a New York public relations executive; Milton Weinger, a broker at Oppenheimer & Company; Thomas Warde, a Los Angeles real estate investor, and David Salamone, a foreign businessman last located in London. In addition, Fred R. Sullivan, former chairman of Kidde Inc. and a director of numerous public companies, including the Tyler Corporation, was accused of providing confidential information to Mr. Downe.
The agency charged that from at least 1987 through 1989 Mr. Downe conspired with Mr. Greenberg “to exploit their access” to inside information to generate at least $23 million in illegal profits for themselves, their family and their friends. Hours after the S.E.C. civil complaint was filed, Mr. Downe, 62 years old, appeared in Federal District Court in Manhattan to plead guilty to two related criminal charges, brought by the United States Attorney’s Office in New York. Insider Trading Tenacious
The S.E.C. case, besides being one of the most important brought in recent years by the New York office, illustrates just how tenacious the problem of insider trading is on Wall Street. The trades cited by the S.E.C. took place in the midst of other highly visible insider-trading investigations — cases that supposedly had put the financial community on notice that regulators and prosecutors were ready to pounce on such activity. The S.E.C. case also offered clues to previously unexplained stock price movements. [ Page D1. ]
Mr. Downe, as a consequence of pleading guilty to one charge of conspiracy and another of failing to disclose securities purchases he made as a director, faces a maximum five-year prison term and $250,000 fine on each charge. In addition, the S.E.C. is seeking to recover at least $23 million in asserted insider profits from the defendants, including $8 million from Mr. Downe, and fines of up to three times the total profits reaped by the defendants and others with whom they shared information.
But lawyers said that the related case brought against Mr. Downe by the United States Attorney was especially significant because it reflected a new approach by the Government, relying on a section of the securities code that had not figured in earlier Federal prosecutions. This strategy, Government lawyers said, may ease the prosecutors’ burden of proof.
People in the legal community said yesterday that the Government was aware of a number of others, some with celebrity status, who have supposedly participated in the scheme. They said the criminal investigation was continuing.
“This is a classic — and very significant — insider trading case,” said Richard Walker, the New York regional S.E.C. administrator, after the charges were filed yesterday. “Obviously, the commission hopes that by bringing cases like this, we can send the message that this is something we simply will not tolerate.”
The SEC won’t tolerate it but Chris Dodd will. Until now, of course. Now Dodd is a champion of “the little people” and is going to run roughshod over Wall Street crooks. Nice conversion, Chris.