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127-521: The stock of Johns-Manville Corporation had been included in the Dow Jones Industrial Average from January 29, 1930 to August 27, 1982, when it was replaced by American Express . In 1981, Johns-Manville Corporation was renamed simply Manville. In 1982, facing unprecedented liability for asbestos injury claims, the company voluntarily filed for bankruptcy under Chapter 11 of the U.S. Bankruptcy Code. Berkshire Hathaway bought

254-453: A Chapter 11 bankruptcy. Agreeing with Aguirre's argument, the judge ordered Manville to post a bond. Eight weeks later, on August 26, 1982, Manville did file for Chapter 11 protection from multiple damage awards, shocking financial analysts . Unlike the more than 12,000 other plaintiffs, primarily asbestos cases, Aguirre's clients' judgment was insured by a $ 9 million bond. All lawsuits against Manville were immediately stayed , but

381-631: A Master of Fine Arts degree in film from UCLA . While living in Spain in 2000, he became transfixed by the Bush v. Gore case and began thinking about the letter he had received from Robert F. Kennedy, which he had kept because it inspired him. Re-reading the letter, he was again inspired, reminded that lawyers can have a role beyond construction-defect cases. At the age of 61, Aguirre went back to law school at Georgetown University Law Center to study international and securities law. Aguirre received

508-629: A Master of Laws degree with distinction (honors) in 2003 and in January 2004, his LL.M thesis won second place in the Association of Securities and Exchange Commission Alumni Annual Securities Law Writing Competition and was published in the Delaware Journal of Corporate Law . Four of his professors were on the SEC staff, including one, Mark Kreitman, who later became his supervisor at

635-626: A federal bankruptcy judge in New York separated Aguirre's case from the others, paving the way for Aguirre's clients to receive their payments. The thousands of other lawsuits remained frozen until May 1988. In July 2004, Aguirre entered public service as a senior counsel at the SEC Division of Enforcement in Washington, D.C. A routine check of Wall Street trades flagged unusually heavy stock purchases by Pequot Capital Management ,

762-668: A hedge fund , in Heller Financial in July 2001, which was bought by GE Capital shortly thereafter, earning Pequot $ 18 million inside of a month. Aguirre was made the lead investigator on the case. First of all, the profit on it was $ 18 million in one month and it was handled solely by the CEO of the hedge fund [Arthur Samberg] without collaboration by anybody else. In fact, their internal regulations about how you were supposed to make these kinds of decisions—talk to other people, visit

889-526: A public defender , then worked as a trial lawyer in California. Having reached his professional and financial goals, he took an extended break in 1995. In 2000, he decided to go into public service and went back to law school, focusing on international and securities law. After earning his second law degree, he applied for a job with the SEC, where he became the lead investigator on an insider trading case involving Pequot Capital Management . Suspecting

1016-589: A stucco -like product for use on exterior walls. Within a short time, the product was found to be defective and deteriorate rapidly, causing significant damage to homes and buildings. Manville pulled the product off the market in 1974, just four years after it was introduced. In the course of preparing his case, Aguirre began monitoring Manville in October 1981, when the company undertook a reorganization that moved 75% of its assets to four of five new companies it created. The board of directors and officers remained in

1143-659: A billion dollars involved insider trading. Aguirre warned that lack of effective oversight of rampant corruption was allowing Wall Street the same unregulated market abuse and leveraging that caused the Wall Street crash of 1929 . In 2008, he delivered a similar message at the Sibos conference in Vienna . Just prior to the collapse of Bear Stearns , he wrote a letter to the Senate Banking Committee that

1270-612: A confidential briefing on the matter. Aguirre accused the SEC of failing to pursue Mack because of his political connections as a major fundraiser for George W. Bush . By 2006, both the Senate Finance Committee and the Senate Judiciary Committee were investigating the matter, culminating in what Forbes magazine called a "scathing" report. In testimony, Aguirre told the committee there needed to be better regulation of hedge funds to protect

1397-401: A court order forcing the SEC to give him key records of its then closed Pequot investigation and later that year, he uncovered the evidence necessary to prove an insider trading charge against Pequot, founder Arthur Samberg and his former employee, David Zilkha On January 2, 2009, Aguirre sent a 16-page letter with the evidence to Christopher Cox , then SEC chairman. In it, he argued that there

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1524-637: A factor, which is approximately 0.163 as of November 2024 . The factor is changed whenever a constituent company undergoes a stock split so that the value of the index is unaffected by the stock split. First calculated on May 26, 1896, the index is the second-oldest among U.S. market indices, after the Dow Jones Transportation Average . It was created by Charles Dow , co-founder of both The Wall Street Journal and Dow Jones & Company , and named after him and his business associate, statistician Edward Jones . The index

1651-545: A large manufacturing plant in the borough. Dow Jones Industrial Average The Dow Jones Industrial Average ( DJIA ), Dow Jones , or simply the Dow ( / ˈ d aʊ / ), is a stock market index of 30 prominent companies listed on stock exchanges in the United States. The DJIA is one of the oldest and most commonly followed equity indexes. Many professionals consider it to be an inadequate representation of

1778-543: A lawyer, but he takes his Rolodex with him and that Rolodex is gold. The system maintains itself, because those that stay know their turn will come if they play the game. —Gary J. Aguirre The following week, first the Senate and then the House unanimously passed bills to repeal the exemptions. Obama signed the bill repealing the exemption on October 5, 2010. Aguirre describes the SEC as an agency created to protect

1905-585: A letter that spoke of the special role lawyers played in bringing about orderly change to the nation. Just eight days after sending the letter, Kennedy was assassinated . After a year, Aguirre left Brobeck to become a public defender in Fresno County , where he found both the trial experience and public service he was seeking. Later moving back to private practice in San Diego, he made a name for himself by proving that Pacific Southwest Airlines (PSA)

2032-625: A major contributor to the 2004 presidential campaign of George W. Bush. Initially, Aguirre had the full support of other SEC staff and of his supervisors. This changed on June 23, 2005, when Aguirre received a phone call from Eric Dinallo, head of regulatory compliance at Morgan Stanley, who wanted to know if the SEC was "going to proceed against Mack" because of concerns revolving around Morgan Stanley's decision to hire Mack as CEO. The same day, Aguirre's supervisor, Robert Hanson, told him it would be an uphill battle to pursue Mack because of Mack's "powerful political connections". Just three days after

2159-471: A much higher-priced stock, even though the lower-priced stock experienced a larger percentage change. In addition, a $ 1 move in the smallest component of the DJIA has the same effect as a $ 1 move in the largest component of the average. For example, during September–October 2008, former component AIG 's reverse split-adjusted stock price collapsed from $ 22.76 on September 8 to $ 1.35 on October 27; contributing to

2286-516: A negative return during most of the 1930s for new and old stock market investors. For the decade, the Dow Jones average was down from 248.48 at the beginning of 1930, to a stable level of 150.24 at the end of 1939, a loss of about 40%. Post-war reconstruction during the 1940s, along with renewed optimism of peace and prosperity, brought about a 33% surge in the Dow from 150.24 to 200.13. The strength in

2413-539: A partner at Davis Polk & Wardwell , where according to the Wall Street Journal , she would be part of its "white-collar defense group". Robert Khuzami , who succeeded her, worked as a prosecutor in the U.S. Attorney 's office in Manhattan's Southern District of New York , then went to Deutsche Bank for several years before returning being named SEC Enforcement Director. The SEC's handling of

2540-415: A precedent, Aguirre's supervisors re-evaluated his job performance, reversing the positive appraisal given just one month prior. While on vacation, Aguirre was abruptly fired without warning on September 1, 2005. His termination was later found to have been unlawful by the subsequent Senate investigations and report. Berger stopped the investigation of Mack and closed the case against Pequot without filing

2667-548: A range between 53 and 103 until late 1914. The negativity surrounding the 1906 San Francisco earthquake did little to improve the economic climate; the index broke 100 for the first time in 1906. At the start of the 1910s, the Panic of 1910–1911 stifled economic growth. On July 30, 1914, as the average stood at a level of 71.42, a decision was made to close the New York Stock Exchange , and suspend trading for

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2794-478: A record Warren Buffett called "a wonderful century"; when he calculated that to achieve that return again, the index would need to close at about 2,000,000 by December 2099. On September 17, 2001, the first day of trading after the September 11 attacks on the United States, the Dow fell 7.1%. However, the Dow began an upward trend shortly after the attacks, and regained all lost ground to close above 10,000 for

2921-460: A report confirming the link between asbestos and cancer. During the 1960s, 1970s and 1980s, the company faced thousands of individual and class action lawsuits based on asbestos-related injuries such as asbestosis , lung cancer and malignant mesothelioma . Many new settlements included offering $ 600 for asbestosis, while the FAIR Act called for $ 12,000 for this condition level. As a result,

3048-407: A roughly 3,000-point drop in the index. As of June 2021, Goldman Sachs and UnitedHealth Group are among the highest-priced stocks in the average and therefore have the greatest influence on it. Alternately, Cisco Systems and Coca-Cola are among the lowest-priced stocks in the average and have the least sway in the price movement. Critics of the DJIA and most securities professionals recommend

3175-452: A secrecy order. In 1943, Samac Laboratory in New York confirmed the link between asbestos and cancer, but Johns-Manville suppressed the report. From approximately 1930 to 1950, attorney Vandiver Brown handled involvement in such lawsuits. Files and testimony alleged that "[Johns-Manville] maintained a policy into the 1970s of not telling its employes that their physical examinations showed signs of asbestosis". In 1943, Johns-Manville suppressed

3302-441: A single charge. A few months prior, on January 31, 2005, Berger had gotten an e-mail from Jan Lower, another attorney, describing in detail the $ 2 million potential earnings an SEC official could earn at Debevoise. On September 8, 2005, just days after Aguirre was fired, an SEC official at the same staff level as Berger wrote an e-mail to him titled "Debevoise", saying he had mentioned Berger's "interest" to White and within weeks, it

3429-635: A span of four and a half months. Some historians believe the exchange was closed because of a concern that markets would plunge as a result of panic over the onset of World War I . An alternative explanation is that the United States Secretary of the Treasury , William Gibbs McAdoo , closed the exchange to conserve the U.S. gold stock in order to launch the Federal Reserve System later that year, with enough gold to keep

3556-502: A starting salary on the outside and can move up from there. Now, when he leaves, I'm not sure he's worth $ 2 million as a lawyer, but he takes his Rolodex with him and that Rolodex is gold. The system maintains itself, because those that stay know their turn will come if they play the game. They see a director or associate director move onto a $ 2 million job with a Wall Street law firm. Then, the departed employee calls back to his former colleagues and says, 'you know I really don't think there

3683-463: A time of economic uncertainty and troubled relations between the U.S. and certain Middle-Eastern countries. The 1970s energy crisis was a prelude to a disastrous economic climate along with stagflation , the combination of high unemployment and high inflation. However, on November 14, 1972, the average closed at 1,003.16, above the 1,000 mark for the first time, during a brief relief rally in

3810-738: A whistleblower, a former comptroller at Sempra Global , who claims Sempra paid kickbacks to Mexican government officials and has filed a suit against the SEC alleging the SEC "outsourced" its investigation of Sempra to a law firm with ties to Sempra, in effect subverting the law. Aguirre is a lawyer in San Diego , California. He was admitted to the State Bar of California on December 23, 1966. He became an associate at Brobeck, Phleger & Harrison , then one of San Francisco 's largest firms. In his spare time, worked on Robert F. Kennedy 's presidential campaign. On May 28, 1968, Kennedy sent him

3937-454: A wholly owned subsidiary of Berkshire Hathaway ( NYSE :  BRK.A , NYSE :  BRK.B ). In 2012, Johns Manville appointed a new CEO, Mary Rhinehart. She was the CFO for Johns Manville and had been with the company for over 33 years. In 2020, Bob Wamboldt became the president and CEO, while Rhinehart remained as chairman. The town of Manville, New Jersey , is named for the company. It had

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4064-610: Is [not] consistent with the Commission's mission, which is "to protect investors, maintain fair, orderly, and efficient markets, and facilitate capital formation ." In this e-mail, Aguirre also reported to Berger that Hanson had said Mack had "political connections". After Aguirre raised concerns about the special treatment being given Mack, Berger told Hanson to do a "supplemental evaluation" of Aguirre and one other staff attorney "looking to raise trouble". The Senate report notes that such re-evaluations were not an authorized part of

4191-770: Is a manufacturer and marketer of products for building insulation, mechanical insulation, commercial roofing and roof insulation, as well as fibers and non-woven materials for commercial, industrial and residential applications. The company serves markets that include aerospace, automotive and transportation, air handling, appliance, HVAC, pipe and equipment, filtration, waterproofing, building, flooring, interiors and wind energy. Johns Manville has annual sales over $ 4.5 billion. The company employs 8,000 people and operates 46 manufacturing facilities in North America and Europe. The present-day Johns Manville company traces its origins to two early manufacturers of construction materials. At

4318-529: Is computed as the sum of the prices of all thirty stocks divided by a divisor , the Dow Divisor. The divisor is adjusted in case of stock splits, spinoffs or similar structural changes, to ensure that such events do not in themselves alter the numerical value of the DJIA. Early on, the initial divisor was composed of the original number of component companies; this initially made the DJIA a simple arithmetic average. The present divisor, after many adjustments,

4445-468: Is less than one, making the index larger than the sum of the prices of the components. That is: where p are the prices of the component stocks and d is the Dow Divisor . Events such as stock splits or changes in the list of the companies composing the index alter the sum of the component prices. In these cases, in order to avoid discontinuity in the index, the Dow Divisor is updated so that

4572-530: Is maintained by S&P Dow Jones Indices , an entity majority-owned by S&P Global . Its components are selected by a committee. The ten components with the largest dividend yields are commonly referred to as the Dogs of the Dow . As with all stock prices, the prices of the constituent stocks and consequently the value of the index itself are affected by the performance of the respective companies as well as macroeconomic factors. As of November 15, 2024,

4699-477: Is much of a case against so-and-so, I'd like for you to take a look at it.' And the case goes away; the system goes on in perpetuity." Two of Aguirre's supervisors left the SEC for lucrative positions at private law firms. Paul Berger works at Debevoise and Plimpton. After failing to investigate the Bernie Madoff ponzi scheme , Linda Chatman Thomsen left her position as SEC Enforcement Director to become

4826-710: Is repugnant to the host of regulations that require the SEC to be neutral, unbiased and treat everybody the same." Aguirre received a Bachelor of Science degree from the University of California, Berkeley in 1962, and a law degree from Boalt Hall in 1966, where he was the recipient of a Ford Foundation grant. During a trip to Russia in 1987, Aguirre met some filmmakers at the Moscow Film Festival and discovered an interest in film. Having reached his professional and financial goals, Aguirre left his law practice in 1995. He returned to college, earning

4953-609: Is typically carried out in an open outcry auction, or over an electronic network such as CME's Globex platform. The Chicago Board Options Exchange (CBOE) issues option contracts on the Dow through the root symbol DJX. Options on various Dow-underlying ETFs are also available for trading. The following table shows the annual development of the Dow Jones Index, which was calculated back to 1896. In 1884, Charles Dow composed his first stock average, which contained nine railroads and two industrial companies that appeared in

5080-539: The 1980s oil glut , the Japanese asset price bubble , and other political distractions. The index had only two negative years in the 1980s: in 1981 and 1984. The 1990s brought on rapid advances in technology along with the introduction of the dot-com era . The markets contended with the 1990 oil price shock compounded with the effects of the early 1990s recession and a brief European situation surrounding Black Wednesday . Certain influential foreign conflicts such as

5207-836: The 1991 Soviet coup d'état attempt which took place as part of the initial stages of the Dissolution of the Soviet Union and the Revolutions of 1989 ; the First Chechen War and the Second Chechen War , the Gulf War , and the Yugoslav Wars failed to dampen economic enthusiasm surrounding the ongoing Information Age and the " irrational exuberance " (a phrase coined by Alan Greenspan ) of

Johns Manville - Misplaced Pages Continue

5334-555: The Customer's Afternoon Letter , a daily two-page financial news bulletin which was the precursor to The Wall Street Journal . On January 2, 1886, the number of stocks represented in what is now the Dow Jones Transportation Average dropped from 14 to 12, as the Central Pacific Railroad and Central Railroad of New Jersey were removed. Though comprising the same number of stocks, this index contained only one of

5461-491: The Dubai World 2009 debt standstill, and the 2011 United States debt-ceiling crisis . On May 6, 2010, the Dow lost 9.2% intra-day and regained nearly all of it within a single hour. This event, which became known as the 2010 Flash Crash , sparked new regulations to prevent future incidents. Six years after its previous high in 2007, the Dow finally closed at a new record high on March 5, 2013. It continued rising for

5588-580: The Manville Corporation, which had national importance. Arguing on behalf of homeowners in construction-defect cases, by 1994, Aguirre and his partner had won 94 consecutive cases, recovering over $ 200 million for the plaintiffs. Aguirre has received three "Outstanding Trial Lawyer" awards from the San Diego Trial Lawyers Association. In the early 1970s, Manville Corporation, a Dow Jones company sold

5715-621: The Second Sino-Japanese War of 1937. The United States experienced the Recession of 1937–1938 , which temporarily brought economic recovery to a halt. The largest one-day percentage gain in the index happened in the depths of the 1930s bear market on March 15, 1933, when the Dow gained 15.34% to close at 62.10. However, as a whole throughout the Great Depression, the Dow posted some of its worst performances, for

5842-604: The Vietnam War ended in 1975, new tensions arose towards Iran surrounding the Iranian Revolution in 1979. Performance-wise for the 1970s, the index remained virtually flat, rising 4.8% from 800.36 to 838.74. The 1980s began with the early 1980s recession . In early 1981, the index broke above 1,000 several times, but then retreated. After closing above 2,000 in January 1987, the largest one-day percentage drop occurred on Black Monday , October 19, 1987, when

5969-489: The dot-com bubble . Between late 1992 and early 1993, the Dow staggered through the 3,000 level making only modest gains as the biotechnology sector suffered through the downfall of the Biotech Bubble; as many biotech companies saw their share prices rapidly rise to record levels and then subsequently fall to new all-time lows. The Dow soared from 2,753 to 8,000 between January 1990 to July 1997. In October 1997,

6096-545: The market-capitalization weighted S&P 500 Index or the Wilshire 5000 , the latter of which includes most publicly listed U.S. stocks, as better indicators of the U.S. stock market. Gary J. Aguirre Gary J. Aguirre is an American lawyer , former investigator with the United States Securities and Exchange Commission (SEC) and whistleblower . After working in a law firm briefly, he became

6223-567: The 10,000 mark by year end. The Dow continued climbing and reached a record high of 14,198.10 on October 11, 2007, a mark which was not matched until March 2013. It then dropped over the next year due to the 2007–2008 financial crisis . On September 15, 2008, a wider financial crisis became evident after the Bankruptcy of Lehman Brothers along with the economic effect of record high oil prices which had reached almost $ 150 per barrel two months earlier. The Dow lost more than 500 points for

6350-529: The DJIA is possible via index funds as well as via derivatives such as option contracts and futures contracts . Index funds , including mutual funds and exchange-traded funds (ETF) can replicate, before fees and expenses, the performance of the index by holding the same stocks as the index in the same proportions. An ETF that replicates the performance of the index is issued by State Street Corporation ( NYSE Arca :  DIA ). ProShares offers leveraged ETFs that attempt to produce three times

6477-531: The Dow Jones Industrial Average consists of the following companies, with a weighting as shown: As of November 8, 2024, the components of the DJIA have changed 59 times since its beginning on May 26, 1896. General Electric had the longest presence on the index, beginning in the original index in 1896 and ending in 2018, but was dropped and re-added twice between 1898 and 1907. Changes to the index since 1991 are as follows: Investing in

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6604-405: The Dow fell nearly 20%. By early January 2019, the index had quickly rallied more than 10% from its Christmas Eve low. Overall in the 2010s decade, the Dow increased from 10,428.05 to 28,538.44 for a substantial gain of 174%. Despite the emerging COVID-19 pandemic , the Dow continued its bull run from the previous decade before peaking at 29,551.42 on February 12, 2020 (29,568.57 intraday on

6731-619: The Dow occurred despite the Recession of 1949 and various global conflicts. During the 1950s, the Korean War and the Cold War did not stop the Dow's climb higher. A nearly 240% increase in the average from 200.13 to 679.36 ensued over the course of that decade. The Dow began to stall during the 1960s as the markets trudged through the Kennedy Slide of 1962 , but still managed an 18% gain from 679.36 to 800.36. The 1970s marked

6858-450: The Fed won't tell us. The Fed publishes information but not enough for you to figure out what the hell happened," Aguirre said. Aguirre represents Darcy Flynn , an SEC lawyer who also became a whistleblower after Robert Khuzami asked his staff in an e-mail on May 18, 2011 to report any questionable behavior on the part of lawyers representing clients. Though Khuzami had meant lawyers outside

6985-646: The H.W. Johns-Manville Company. In 1926, the firm was renamed to Johns-Manville Corporation. During the 1930s, industrialist Lewis H. Brown was president of the company. In 1949, the Canadian branch of the company was involved in the Asbestos Strike at its mines in Asbestos , Quebec . In 1958, Johns-Manville bought Glass Fibers, Inc., based in Toledo, Ohio , from Randolph Barnard. This purchase propelled

7112-460: The Pequot investigation. The filing of the case in 2005 or 2006, before the financial crisis, would have been the right message at the right moment for Wall Street elite: the SEC goes after big fish too. —Gary J. Aguirre In 2007, Senators Chuck Grassley and Arlen Specter urged the SEC to reopen the case against Pequot, but it remained closed. Making extensive use of the documents released by

7239-513: The S&;P 500 Index or the Russell 3000 Index . Additionally, the DJIA is criticized for being a price-weighted index , which gives higher-priced stocks more influence over the average than their lower-priced counterparts, but takes no account of the relative industry size or market capitalization of the components. For example, a $ 1 increase in a lower-priced stock can be negated by a $ 1 decrease in

7366-526: The SEC "outsourced" its investigation to a law firm with ties to Sempra and seeks SEC records that indicate how the SEC conducted the investigation. Baker & McKenzie and Jones Day investigated the bribery charges. Sempra's executive vice president and general counsel was previously a partner at Jones Day. Aguirre said, "The notion that there is a class of companies, Fortune 500 Companies and Wall Street banks and Wall Street in general who are able to conduct their own investigations through favorite law firms

7493-487: The SEC and relied heavily on the Senate report. It noted how the SEC resisted deposing Mack and didn't considering him a potential tipper until after a front-page article in The New York Times revealed the derailed investigation and then did not depose him until the statute of limitations for civil and criminal penalties had run out. It's a shame the team I worked with at the SEC did not get to complete

7620-630: The SEC and the Justice Department had failed to adequately prosecute abuses by hedge funds, and he compared the situation to that which preceded the stock market crash of 1929 . In the Senate's oversight role, it conducted an extensive investigation of whether or not Mack received unlawful preferential treatment from the SEC and whether or not Aguirre was unlawfully fired as a result of objecting to this treatment. The Senate reviewed 10,000 pages of documents and held more than 30 witness interviews. Additionally, there were three hearings before

7747-482: The SEC evaluation process, nor were SEC officials able to recall other instances where "supplemental evaluations" were drafted for other employees. Aguirre continued to have conversations with Hanson about Mack in the early days of August. Hanson continued to refer to Mack's political connections and on August 4, 2005 wrote, "Mack's counsel will have 'juice' as I described last night—meaning that they may reach out to Paul and Linda (and possibly others)." Apparently setting

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7874-459: The SEC for $ 28 million and a month later, the SEC settled the wrongful termination suit filed by Aguirre for $ 755,000. Aguirre returned to private practice in San Diego in 2008, specializing in securities law. He has emerged as a major critic of the SEC, calling it an agency that was set up to protect the public from Wall Street, but now protects Wall Street from the public. He represents Darcy Flynn , also an SEC whistleblower, who in summer 2011

8001-464: The SEC goes after big fish too." Aguirre now specializes in securities law, defending those victimized by investor fraud and those wishing to come forward to expose abuses. In 2008, he returned to San Diego with a reputation for winning cases. He continued to work on the Pequot insider trading investigation, collecting and piecing together evidence, gaining information through Freedom of Information Act (FOIA) requests. In April 2008, he obtained

8128-571: The SEC had failed to file charges against Pequot or anyone else, under the FOIA, the SEC must turn over the records. The following morning, on May 27, 2010, using allegations that closely follow Aguirre's January letter, the SEC filed charges against Pequot, Samberg and Zilkha. Aguirre is helping Senator Grassley's staff examine 21,000 Federal Reserve (the Fed) transactions involving taxpayer funds distributed to banks and other financial institutions. The Fed

8255-474: The SEC has completely lost sight of its mission and that the mentality and culture won't change until the agency is no longer "run by attorneys who are on sabbatical" from Wall Street. On July 22, 2010, President Barack Obama signed Wall Street reform legislation, the Dodd–Frank Wall Street Reform and Consumer Protection Act , which included a provision to exempt the SEC from FOIA requests by

8382-467: The SEC relied heavily on his article, "The Dodd-Frank Act: A FOIA Exemption for SEC Misconduct?" from Wall Street Lawyer . Congressional testimony by the Project on Government Oversight at a hearing on legislative proposals to address the problem referred to Aguirre's case as an example of the crucial need for public oversight of government agencies. Aguirre said the new bill would block public access to

8509-412: The SEC to him, Aguirre uncovered incriminating evidence proving Pequot had engaged in insider trading of Microsoft and he shared this evidence with the SEC in a 16-page letter to SEC chairman Christopher Cox , dated January 2, 2009. Within days, the SEC re-opened the investigation, but no charges were filed in the weeks or months following, though when it did finally file charges, they closely followed

8636-498: The SEC to release additional Pequot records to him on the grounds that under the FOIA, the SEC had to turn the records over to him because it had filed no case against Pequot or anyone else. Early the next morning, on May 27, 2010, the SEC filed charges against Pequot, Samberg and Zilkha and announced a settlement with Pequot. A month later, the SEC agreed to pay Aguirre $ 755,000, an amount equal to four years and ten months of lost salary and attorney's fees. The amount appears to be

8763-447: The SEC's investigation of Pequot and Mack. The SEC, claiming several exemptions under the law released redacted versions of the documents, thereby withholding information. They also failed to produce Aguirre's original personnel file. Aguirre alleged in his suit that the SEC had failed to conduct an adequate search for documents and he challenged the SEC's failure to produce his original personnel file, which contained records missing from

8890-479: The SEC's records and hamper oversight. Other critics called the bill a "backroom deal" between the SEC and the U.S. Congress to cover up SEC failures. All the agencies have to some extent or another a revolving door. But at the SEC, what you rotate into is an enormous salary leap. SEC managers may make $ 200,000. That same person may make $ 2 million as a starting salary on the outside and can move up from there. Now, when he leaves, I'm not sure he's worth $ 2 million as

9017-504: The SEC's refusal to interview Mack. In the meantime, he was given his year-end performance evaluation, which noted his dedication. Hanson wrote, "[Aguirre] has consistently gone the extra mile, and then some," and a two-step salary increase was approved. A month later, on July 27, 2005, Aguirre sent an e-mail to his supervisor Paul R. Berger, explaining the importance of the Mack subpoena and expressing concern that "treating Mack differently

9144-451: The SEC, Flynn reported activity that had taken place within the SEC. Early in Flynn's 13-year career at the SEC, he worked on a case where investigators thought they had clear evidence of fraud against Deutsche Bank. In an interview with Der Spiegel , CEO Rolf Breuer had denied the bank was involved in talks to acquire Bankers Trust , causing Bankers Trust stock to drop, which could lower

9271-653: The Senate Judiciary Committee in June, September and December 2006. The joint report was officially released August 3, 2007. The Senate found Aguirre to have been well regarded until he questioned the SEC's misconduct toward Mack, that Mack was treated preferentially and that Aguirre was illegally fired in retaliation. Aguirre then sued the SEC under the Freedom of Information Act (FOIA) seeking documents related to his employment and discharge, as well as

9398-458: The Senate she told White she couldn't say anything about the Mack investigation, the Senate report said White's talking points indicated Thomsen had said there was "smoke" but "surely not fire". Over the next two days, Aguirre sent his supervisors his analysis of the evidence against Pequot and proposed interviewing Mack. On June 28, he had a "heated discussion" with Mark Kreitman, one of his supervisors and his former professor at Georgetown, over

9525-554: The US equities market, particularly the S&;P 500 Index . Between ( 1980-January-{{{day}}} ) ( 2023-November-{{{day}}} ) January 1980 – November 2023 , the DJIA returned an annualized 8.90%, with the S&P 500 returning a nearly identical 8.91%. With the inclusion of only 30 stocks, critics such as Ric Edelman argue that the DJIA is an inaccurate representation of overall market performance compared to more comprehensive indices such as

9652-545: The United Press International) closed over 30,000 on December 31, 2020, at a record 30,606.48. On November 24, following news that the presidential transition of Joe Biden was approved, the Dow increased by more than 500 points, closing at 30,046.24. On January 22, 2024, the Dow Jones crossed 38,000 points for the first time; a month later it surpassed 39,000; and in May, it surpassed 40,000 points. The DJIA

9779-491: The United States on par with the gold standard . When the markets reopened on December 12, 1914, the index closed at 74.56, a gain of 4.4%. This is frequently reported as a large drop, due to using a later redefinition. Reports from the time say that the day was positive. Following World War I, the United States experienced another economic downturn, the Post–World War I recession . The Dow's performance remained unchanged from

9906-614: The age of 21, Henry Ward Johns had already patented roofing and insulation products. In 1858, he founded the H.W. Johns Manufacturing Company in New York City . In 1885, the Manville Covering Company was established in Wisconsin by Charles B. Manville, whose grandson was the much-married socialite Tommy Manville . In 1901, the H.W. Johns Manufacturing Company and the Manville Covering Company merged to form

10033-451: The average fell 22.61%. There were no clear reasons given to explain the crash. On October 13, 1989, the Friday the 13th mini-crash , which initiated the collapse of the junk bond market, resulted in a loss of almost 7% of the index in a single day. During the 1980s, the Dow increased 228% from 838.74 to 2,753.20; despite the market crashes, Silver Thursday , an early 1980s recession ,

10160-488: The bank and a few years later, recommended him to become SEC enforcement director. Flynn was interviewed by staff from three congressional committees in summer 2011 on the Deutsche Bank case and the destruction of files from thousands of preliminary investigation cases conducted by the SEC. Senator Grassley wrote a letter to the SEC about the document destruction and SEC inspector general H. David Kotz investigated

10287-514: The call to Aguirre, Mary Jo White placed a call to Linda Chatman Thomsen . Thomsen was then SEC Director of Enforcement and Aguirre's boss four levels above him. White is a partner at Debevoise & Plimpton , the law firm hired by Morgan Stanley to vet Mack and was in charge of the process She had previously been the U.S. Attorney for the Southern District of New York which has jurisdiction over Wall Street. Though Thomsen told

10414-401: The case, on July 10, 2001 he recused himself. On July 23, 2001, a letter was sent to Deutsche Bank informing them, ""Inquiry in the above-captioned matter has been terminated." The SEC dropped the fraud investigation without the customary explanation of its decision to close the case. On October 1, 2001, Walker was hired as general counsel by Deutsche Bank. In 2004, he hired Khuzami to work at

10541-474: The closing value of the previous decade, adding only 8.26%, from 99.05 at the beginning of 1910, to a level of 107.23 at the end of 1919. The Dow experienced a long bull run from 1920 to late 1929 when it rose from 73 to 381 points. In 1928, the components of the Dow were increased to 30 stocks near the economic height of that decade, which was nicknamed the Roaring Twenties . This period downplayed

10668-493: The company in 2001, then chairman and CEO Jerry Henry retired in 2004. At that point, Steve Hochhauser became chairman, president and CEO. Todd Raba succeeded him in the summer of 2007; he came from MidAmerican Energy Holdings , another Berkshire Hathaway company. In November 2012, Mary Rhinehart was named president and CEO, and she added the title of chairman in 2014. In September 2020, Bob Wamboldt became CEO and president, while Rhinehart remained as chairman. Today, Johns Manville

10795-543: The company voluntarily filed for chapter 11 bankruptcy protection in 1982. At that time, it was the largest company in United States history to have done so. The filing shocked financial analysts , but a few, such as Gary J. Aguirre , had predicted the filing and had forced the company to post a bond to guarantee payment to their clients. The bankruptcy was resolved by the formation of the Manville Trust to pay asbestos tort claimants in an orderly fashion by giving

10922-630: The company's insulation division. At that time, Dominick Labino was working for Glass Fibers; Barnard and Labino both joined Johns-Manville. Glass Fibers had several plants in Waterville and Defiance, which are still in operation under Johns Manville, Beginning just after World War II, sculptor Beverly Bender spent thirty-two years working in the art department of Johns-Manville, creating animal sculpture in her free time. Starting as early as 1929, Johns-Manville employees began claiming disability from lung diseases. The claims settled out of court, with

11049-564: The company—none of these things was done. There were no e-mails, there were no reports, there was no research, no contact with any companies, no contact with third parties. There was just nothing. One day this guy [Samberg] just says, 'Heller Financial!' As it says in the Senate report, Samberg's orders were sometimes for twice as much stock as sold on that day. So if you're selling 200,000 shares that day, he wanted to buy 400,000. Well, how come you're buying all of this if you've never done any research, you haven't talked to these guys, you don't follow

11176-488: The cost of a merger. SEC investigators began looking into the matter, collecting sworn testimony and documents that proved Breuer had lied. Deutsche Bank hired former SEC enforcement director Gary Lynch to persuade the SEC not to pursue the case, which had to be approved by superiors before proceeding. Approval to go forward with the case was approved by every level and lacked only the signature of Richard H. Walker , then serving as SEC enforcement director. Rather than approve

11303-701: The daily result of either investing in ( NYSE Arca :  UDOW ) or shorting ( NYSE Arca :  SDOW ) the Dow Jones Industrial Average. In the derivatives market, the CME Group through its subsidiaries the Chicago Mercantile Exchange (CME) and the Chicago Board of Trade (CBOT), issues Futures Contracts; the E-mini Dow ($ 5) Futures (YM) , which track the average and trade on their exchange floors respectively. Trading

11430-629: The day, returning to its mid-July lows below 11,000. A series of bailout packages, including the Emergency Economic Stabilization Act of 2008 , proposed and implemented by the Federal Reserve and United States Department of the Treasury did not prevent further losses. After nearly six months of extreme volatility during which the Dow experienced its largest one-day point loss, largest daily point gain, and largest intraday range (of more than 1,000 points) at

11557-458: The decade, the Dow saw a rather substantial pullback for a negative return from 11,497.12 to 10,428.05, a loss of a 9.3%. During the first half of the 2010s decade, aided by the Federal Reserve 's loose monetary policy including quantitative easing , the Dow made a notable rally attempt. This was despite significant volatility due to growing global concerns such as the European debt crisis ,

11684-408: The ensuing Great Depression over the next several years saw the Dow continue to fall until July 8, 1932, when it closed at 41.22, roughly two-thirds of its mid-1880s starting point and almost 90% below its peak. Overall for the 1920s decade, the Dow still ended with a healthy 131.7% gain, from 107.23 to 248.48 at the end of 1929. In inflation-adjusted numbers, the high of 381.17 on September 3, 1929,

11811-488: The events surrounding the 1997 Asian financial crisis plunged the Dow into a 554-point loss to a close of 7,161.15; a retrenchment of 7.18% in what became known as the October 27, 1997 mini-crash . However, the Dow continued climbing past 9,000 despite negativity surrounding the 1998 Russian financial crisis along with the subsequent fallout from the 1998 collapse of Long-Term Capital Management due to bad bets placed on

11938-783: The evidence as stated in Aguirre's letter. On April 1, 2009, Aguirre filed a second lawsuit against the SEC for unlawful disclosure of his records under the Privacy Act of 1974 , for violating the due process clause of the Fifth Amendment and for injunctive relief under the Privacy Act and FOIA. On December 2, 2009, in an interim decision on Aguirre's FOIA case, the Court again ruled in his favor. On May 26, 2010, Aguirre filed papers in this case, seeking an order directing

12065-525: The first quarter of 2020, the DJIA fell 23%, its worst quarter since 1987. The market recovered in the third quarter, returning to 28,837.52 on October 12, 2020, and peaked momentarily at a new all-time high of 29,675.25 on November 9, 2020, at 14:00 ET, following that day's announcement of the success of the Pfizer–BioNTech COVID-19 vaccine in Phase III clinical trials. The Dow (as reported by

12192-742: The influence of the Depression of 1920–1921 and certain international conflicts such as the Polish–Soviet War , the Irish Civil War , the Turkish War of Independence and the initial phase of the Chinese Civil War . After a peak of 381.17 on September 3, 1929, the bottom of the 1929 crash came just 2 months later on November 13, 1929, at 195.35 intraday, closing slightly higher at 198.69. The Wall Street Crash of 1929 and

12319-403: The investigation of Pequot's $ 18 million profit on Heller Financial, contrasts sharply with their aggressive pursuit of a low-level GE employee and a kung fu instructor who made a much smaller trade on Heller, earning a profit of just over $ 150,000. According to Aguirre, decisions to pursue small cases and ignore the much larger ones involving the financial elite are less the exception, than

12446-489: The largest amount in San Diego Superior Court history. The amount was later increased to $ 7.5 million when delay damages were added. On July 2, 1982, the day after winning his lawsuit against Manville, Aguirre went back to court to ask that Manville be required to post a $ 9 million bond to guarantee his clients' judgment in case of a bankruptcy filing, arguing that Manville was on the verge of filing

12573-494: The largest settlement ever disclosed by the Merit Systems Protection Board . On reaching the settlement with the SEC for his wrongful termination, Aguirre said, "It's a shame the team I worked with at the SEC did not get to complete the Pequot investigation. The filing of the case in 2005 or 2006, before the financial crisis , would have been the right message at the right moment for Wall Street elite:

12700-537: The leaked information came from John J. Mack , a Wall Street titan and major contributor to the 2004 campaign of President George W. Bush , Aguirre wanted to subpoena Mack, but supervisors told him Mack had too much "political clout" and would not be pursued. Aguirre complained to a superior about the preferential treatment being given Mack and was fired without warning. A Senate investigation later found his termination to have been an illegal reprisal. In May 2010, Pequot Capital settled its insider trading charges with

12827-502: The matter. In 2006, while testifying before Senator Arlen Specter and the Senate Judiciary Committee about Mack, Pequot Capital and the SEC lack of oversight, he warned that SEC enforcement was dangerously lax. He said that the SEC had recovered a mere $ 110,000 from hedge fund insider trading over one year when the Committee itself had found evidence that over a one-year period, more than 41% of all mergers and acquisitions of over

12954-479: The midst of a lengthy bear market. Between January 1973 and December 1974, the average lost 48% of its value in what became known as the 1973–1974 stock market crash , closing at 577.60 on December 6, 1974. The nadir came after prices dropped more than 45% over two years since the NYSE's high point of 1,003.16 on November 4, 1972. In 1976, the index reached 1,000 several times and it closed the year at 1,004.75. Although

13081-530: The movement of the Russian ruble . On March 29, 1999, the average closed at 10,006.78, its first close above 10,000. This prompted a celebration on the New York Stock Exchange trading floor, complete with party hats. Total gains for the decade exceeded 315%; from 2,753.20 to 11,497.12, which equates to 12.3% annually. The Dow averaged a 5.3% return compounded annually for the 20th century,

13208-569: The nation's banks, and particularly Bear Stearns, were at risk because of subprime debt exposure and credit default swaps . In September 2008, during the debate on the Troubled Asset Relief Program (TARP), Aguirre's projections on the costs of the taxpayer bailout were cited on the floor of the U.S. House of Representatives . Aguirre is frequently quoted and interviewed in the media regarding issues related to financial and securities law and whistleblowers. Aguirre says

13335-460: The next several years past 17,000 points until a brief 2015–2016 stock market selloff in the second half of 2015. It then picked up again in early 2016 and climbed past 25,000 points on January 4, 2018. On November 9, 2016, the day after Donald Trump 's victory over Hillary Clinton in the U.S. presidential election , the index soared, coming within roughly 25 points of its all-time intraday high to that point. Volatility returned in 2018 when

13462-418: The original twelve industrials that would eventually form Dow's most famous index. Dow calculated his first average purely of industrial stocks on May 26, 1896, creating what is now known as the Dow Jones Industrial Average . None of the original 12 industrials still remain part of the index. When it was first published in the mid-1880s, the index stood at a level of 62.76. It reached a peak of 78.38 during

13589-468: The overall U.S. stock market compared to a broader market index such as the S&P 500 . The DJIA includes only 30 large companies. It is price-weighted , unlike other common indexes such as the Nasdaq Composite or S&P 500, which use market capitalization . The value of the index can also be calculated as the sum of the stock prices of the companies included in the index, divided by

13716-492: The public from Wall Street, but now protects Wall Street from the public, and calls it a revolving door , where people move from SEC positions to highly lucrative positions on Wall Street and also in reverse. "All the agencies have to some extent or another a revolving door [where government employees move to the private sector and earn more money]. But at the SEC, what you rotate into is an enormous salary leap. SEC managers may make $ 200,000. That same person may make $ 2 million as

13843-454: The public. Aguirre used FOIA requests to obtain records relating to why his SEC superiors had stymied his Pequot investigation, charges which prompted two U.S. Senate committees to investigate. The documents, released against the wishes of the SEC, led to the discovery of evidence that resulted in a large settlement. Aguirre was the first to speak out about the exemptions and a letter by Congressman Darrell Issa to Mary Schapiro , chairman of

13970-458: The public. He said, "There is growing evidence that today's unregulated hedge funds have advanced and refined the practice of manipulating and cheating other market participants. The potential harm hedge funds can inflict on other market participants has no real limits." He warned that fixing the SEC so it would protect investors and capital markets would not be easy because powerful Wall Street investment banks liked things as they are He said

14097-423: The quotations right before and after the event coincide: Since November 8, 2024, the Dow Divisor is 0.16268413125742 and every $ 1 change in price in a particular stock within the average equates to a 6.146881 (or 1 ÷ 0.16268413125742) point movement. Despite its unusual weighting by price rather than market capitalization, the Dow Jones Industrial Average is highly correlated with other proxies of

14224-404: The recipients' names and amount of funds are known. Aguirre says that between $ 3 and $ 4 trillion in cash transfers were made and another $ 9 to $ 11 trillion in commitments that taxpayer funds would cover the cost of failed investments. "It looks like they are borrowing the money from the Fed, say, at 70 cents on the dollar and selling it back to the Fed for 90 cents. We can't tell for certain because

14351-439: The rule and explain why Bernie Madoff was ignored for so long. In April 2012, representing whistleblower Rodolfo Michelson, Aguirre filed an FOIA claim against the SEC related to Michelson's claims that Sempra Global bribed Mexican government officials in order to advance its projects. Michelon filed suit against the SEC after an SEC investigation into the bribes concluded that the charges had been addressed. The suit alleges that

14478-473: The same day). The index slowly retreated for the remainder of the week and into the next week, before coronavirus fears and an oil price war between Saudi Arabia and Russia sent the index into a tailspin , recording several days of losses (and gains ) of at least 1,000 points, a typical symptom of a bear market as previously seen in October 2008 during the 2007–2008 financial crisis . Volatility rose high enough to trigger multiple 15-minute trading halts . In

14605-399: The same positions, so nothing essential changed; except the assets were diverted. Aguirre became convinced Manville was trying to put its assets beyond the reach of unsecured creditors and when he went to trial, he accurately predicted the company would file between 45 and 60 days. The three-month-long trial concluded with Aguirre winning a $ 6 million award against Manville, at that time,

14732-480: The stock? There was no rational explanation why this guy bought more stock than anybody else in the country during these 30 days. So then we began to backtrack—who did he talk to immediately before he bought it that could've known anything about this stock? Well, of course, there was only one person, and that was John Mack. Aguirre pushed to subpoena John Mack, a top Wall Street executive who was then under consideration by Morgan Stanley to become its CEO and had been

14859-399: The summer of 1890, but reached its all-time low of 28.48 in the summer of 1896 during the Panic of 1896 . Many of the biggest percentage price moves in the Dow occurred early in its history, as the nascent industrial economy matured. In the 1900s, the Dow halted its momentum as it worked its way through two financial crises: the Panic of 1901 and the Panic of 1907 . The Dow remained stuck in

14986-534: The time, the index closed at a new 12-year low of 6,547.05 on March 9, 2009, its lowest close since April 1997. The Dow had lost 20% of its value in only six weeks. Towards the latter half of 2009, the average rallied towards the 10,000 level amid optimism that the Great Recession , the United States housing bubble and the 2007–2008 financial crisis , were easing and possibly coming to an end. For

15113-514: The trust the lion's share of the equity in the company. The bankruptcy took over five years to process and resulted in protracted litigation. The Manville Trust is still in operation today. The company emerged from Chapter 11 in 1988 as the Manville Corporation. In 1997, the company changed its name back to Johns Manville (but without the hyphen), and this is the name under which it does business today. In 2001, Johns Manville became

15240-601: The version given him. On April 28, 2008, the United States District Court for the District of Columbia , citing the Senate report extensively, ruled in his favor, forcing the SEC to turn over documents to Aguirre. The Court wrote of "the importance of understanding the dispute between the parties, as well as plaintiff's legal argument that the public interest in disclosure of the withheld records outweighs any privacy interest" under exemptions claimed by

15367-473: The year. In 2002, the Dow dropped to a four-year low of 7,286 on September 24, 2002, due to the stock market downturn of 2002 and lingering effects of the dot-com bubble . Overall, while the NASDAQ index fell roughly 75% and the S&P 500 index fell roughly 50% between 2000 and 2002, the Dow only fell 27% during the same period. In 2003, the Dow held steady within the 7,000 to 9,000-point level and recovered to

15494-427: Was liable for a mid-air plane crash over San Diego in 1978 , then the worst aviation disaster in U.S. history. In the 1980s, Aguirre pioneered construction-defect litigation , a branch of class-action law previously considered by San Diego lawyers to be too difficult for plaintiffs to win. In 1983, San Diego Magazine called him "a legal fireball" for his case proving PSA's liability and for his case against

15621-411: Was forced to reveal the information by Freedom of Information Act (FOIA) requests by Bloomberg News and Fox News , as well as provisions contained in Wall Street reform legislation. Despite pronouncements by the Fed about its transparency, the information released has been incomplete. The lack of details make it impossible to tell just how much profit the recipients of the funds are making and only

15748-406: Was interviewed by staff from three congressional committees. He said that the SEC had destroyed thousands of records of preliminary investigations and that SEC investigators trying to pursue a case against Deutsche Bank were thwarted by Richard H. Walker , then SEC director of enforcement, who shortly thereafter, took a job at Deutsche Bank as general counsel. He also represents Rodolfo Michelon ,

15875-502: Was not surpassed until 1954. Marked by global instability and the Great Depression, the 1930s contended with several consequential European and Asian outbreaks of war, leading to the catastrophic World War II in 1939. Other conflicts during the decade which affected the stock market included the 1936–1939 Spanish Civil War , the 1935–1936 Second Italo-Abyssinian War , the Soviet-Japanese Border War of 1939 , and

16002-638: Was rumored that Berger would be leaving the SEC to join Debevoise & Plimpton as a partner. Berger submitted his resignation to the SEC on May 15, 2006 and on June 1, 2006 became a partner at Debevoise & Plimpton, where he continues to work. White denies asking the SEC to close any investigation. Aguirre wrote an 18-page letter to members of the U.S. Senate who were chairmen of various related committees and subcommittees, detailing his allegations about Pequot. Senators Charles E. Grassley and Richard C. Shelby , both Republicans , asked SEC officials for

16129-536: Was sufficient evidence to reopen the case and he recommended that the U.S. Department of Justice open an investigation of Pequot, Samberg and Zilkha for possible witness tampering , bribery , obstruction of justice , and violation of the Racketeer Influenced and Corrupt Organizations Act . Because the SEC continued to stonewall, on May 26, 2010, Aguirre sought an order directing the SEC to release additional Pequot records to him. He argued that because

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