With the news this morning that Bayou’s Samuel Israel has turned himself in to police in Southwick, Mass., the long and often bizarre saga of his legal battle, sentencing, faked suicide and RV flight seems to be at an end. His capture certainly is good news from a law-and-order perspective, as he did cheat Bayou Group investors out of some $400 million. But as observers to this strange tale, we can’t help but be a tad disappointed at what appears a rather anticlimactic ending.

Mr. Israel no doubt had his reasons for surrendering, just as he probably had some reason, albeit twisted, for running a pyramid-style scheme on investors in the Bayou fund group. But someone with the determination to flee the law, orchestrate a false suicide, and go on the run with a fully equipped recreational vehicle would seem as though he already had nothing to lose. Why turn himself in now?
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Despite being late May, a snowball-effect is seeing shareholders that were wiped out by the nationalization of Northern Rock join forces in judicial proceedings against the British government. SRM Global, headed by Monaco-based Jon Wood, and the Shareholders Action Group got the ball rolling on May 8 with RAB Capital joining the action eight days later. Now L&G Investment Management has registered its interest in the legal challenges Law Suit. This all comes three months after Northern Rock was taken over.
That time has not been kind to SRM. Launched in mid-2006 with a reported $3 billion, investors told Alternative Reality that the firm’s main fund is now down a whopping 70%. The $150 million or so that SRM lost on Northern Rock looks a long way from being its most pressing problem. Still, its possible (if not likely) that legal action may bring in a few crumbs in compensation from the UK Treasury. This will keep things ticking over in Monaco while investors wait for their three year lock-ups to end in mid-2009.

Last week, Sen. Maria Cantwell became the latest in a long line of politicians (a line that probably dates back to Pericles and the marble-futures market) who blame price increases on speculators and market manipulation.

In a speech on the floor of the Senate, she made reference to the Amaranth matter — which involved natural gas, not crude oil or petroleum – and then demanded that the powers of federal regulators be expanded to crack down on the (hypothetical) Amaranths lurking there.
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