What we’re reading (8/18)
“The CEO Who Made A Fortune While His Hospital Chain Collapsed” (Wall Street Journal). “Steward Health Care System was in such dire straits before its bankruptcy that its hospital administrators scrounged each week to find cash and supplies to keep their facilities running. While it was losing hundreds of millions of dollars a year, Steward paid at least $250 million to its chief executive officer, Dr. Ralph de la Torre, and to his other companies during the four years he was the hospital chain’s majority owner.”
“How A.I. Can Help Start Small Businesses” (New York Times). “[F]or some entrepreneurs, generative A.I. is already a game changer. It is helping them write intricate code, understand complex legal documents, create posts on social media, edit copy and even answer payroll questions. The result, they say, is that A.I. allowed them to get their companies off the ground more quickly, and more efficiently, than they would have without it.”
“Perspective Into The Pentagon’s U.F.O. Hunt” (New York Times). “Luis Elizondo made headlines in 2017 when he resigned as a senior intelligence official running a shadowy Pentagon program investigating U.F.O.s and publicly denounced the excessive secrecy, lack of resources and internal opposition that he said were thwarting the effort. Elizondo’s disclosures at the time created a sensation. They were buttressed by explosive videos and testimony from Navy pilots who had encountered unexplained aerial phenomena, and led to congressional inquiries, legislation and a 2023 House hearing in which a former U.S. intelligence official testified that the federal government has retrieved crashed objects of nonhuman origin. Now Elizondo, 52, has gone further in a new memoir. In the book he asserted that a decades-long U.F.O. crash retrieval program has been operating as a supersecret umbrella group made up of government officials working with defense and aerospace contractors. Over the years, he wrote, technology and biological remains of nonhuman origin have been retrieved from these crashes.”
“‘Dr Doom’ Files To Launch ETF Based On His Calamitous Outlook” (Financial Times). “Nouriel Roubini, aka Dr Doom, has been dishing up his downbeat takes on the global economy and markets for decades. Now investors will finally get the chance to see how his gloomy insights translate into financial returns as Roubini, who earned his Dr Doom moniker for foreseeing the 2008 global financial crisis, turns to managing money for the first time at the age of 66.”
“Insider Trading By Other Means” (Harvard Business Law Review). “For more than thirty years, one of the most prevalent strategies for insider trading has gone undetected and unaddressed. This Article uncovers the techniques by which executives and directors sell overvalued stock worth more than $100 billion per year, shifting losses to ordinary investors. The basic idea is that insiders conceal their suspicious trades by publicly reporting them (as they are required to do) in ways that confuse or discourage investigators. We develop a taxonomy of concealment strategies, complete with suggestive examples. We then empirically test our taxonomy using a database of essentially all stock trades since 1992. We find that insiders who trade using the subterfuges we describe outperform the market by up to 20% on average. Worse yet, we find evidence that this simple subterfuge works. Essentially no one has ever been prosecuted for undertaking one of these suspicious trades. Nor do journalists or scholars seem to appreciate them. Accordingly, we call for scholars and prosecutors to cast a wider net in their studies and market surveillance, then discuss implications for the design of insider-trading reporting requirements and related legal rules.”
