Category Archives: finance industry

What I saw when I crashed a Wall Street secret-society party

f13-iconKevin Roose recounts what he witnessed when he sneaked into the annual black-tie induction ceremony of a secret Wall Street fraternity called Kappa Beta Phi — and then got caught: “Who the hell are you?” [billionaire Michael] Novogratz demanded.

I felt my pulse spike. I was tempted to make a run for it, but – due to the ethics code of the New York Times, my then-employer – I had no choice but to out myself.

“I’m a reporter,” I said.

Novogratz stood up from the table.

“You’re not allowed to be here,” he said.

I, too, stood, and tried to excuse myself, but he grabbed my arm and wouldn’t let go.

“Give me that or I’ll fucking break it!” Novogratz yelled, grabbing for my phone, which was filled with damning evidence. His eyes were bloodshot, and his neck veins were bulging. The song onstage was now over, and a number of prominent Kappas had rushed over to our table. Before the situation could escalate dangerously, a bond investor and former Grand Swipe named Alexandra Lebenthal stepped in between us. Wilbur Ross quickly followed, and the two of them led me out into the lobby, past a throng of Wall Street tycoons, some of whom seemed to be hyperventilating.

Once we made it to the lobby, Ross and Lebenthal reassured me that what I’d just seen wasn’t really a group of wealthy and powerful financiers making homophobic jokes, making light of the financial crisis, and bragging about their business conquests at Main Street’s expense. No, it was just a group of friends who came together to roast each other in a benign and self-deprecating manner. Nothing to see here.

But the extent of their worry wasn’t made clear until Ross offered himself up as a source for future stories in exchange for my cooperation.

“I’ll pick up the phone anytime, get you any help you need,” he said.

“Yeah, the people in this group could be very helpful,” Lebenthal chimed in. “If you could just keep their privacy in mind.”

I wasn’t going to be bribed off my story, but I understood their panic. Here, after all, was a group that included many of the executives whose firms had collectively wrecked the global economy in 2008 and 2009. And they were laughing off the entire disaster in private, as if it were a long-forgotten lark. (Or worse, sing about it — one of the last skits of the night was a self-congratulatory parody of ABBA’s “Dancing Queen,” called “Bailout King.”) These were activities that amounted to a gigantic middle finger to Main Street and that, if made public, could end careers and damage very public reputations.

After several more minutes spent trying to do damage control, Ross and Lebenthal escorted me out of the St. Regis.

As I walked through the streets of midtown in my ill-fitting tuxedo, I thought about the implications of what I’d just seen.

The first and most obvious conclusion was that the upper ranks of finance are composed of people who have completely divorced themselves from reality. [Continue reading…]

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New details emerge of Libya’s claim against Goldman Sachs

n13-iconEuromoney: A year ago, Euromoney reported that the Libyan Investment Authority was preparing litigation against Goldman Sachs for disastrous trades the US bank had put the Libyan sovereign wealth fund into in early 2008.

Nothing happens fast in Libya, and the top management of the fund has changed since our story. But on January 28, its lawyers lodged a claim at London’s High Court, accusing Goldman of “deliberately exploit[ing] the relationship of trust and confidence it has established with the LIA.”

Euromoney has seen the Particulars of Claim document lodged with the High Court by Simon Twigden, a partner and commercial dispute resolution expert at Enyo Law, on the LIA’s behalf. It makes savage reading for Goldman; it says that equity derivatives trades implemented by the bank lost the fund more than $1 billion while earning Goldman $350 million in profits.

After incurring these losses, Libya asked Goldman for a remedy. In May, 2009, the bank suggested that Libya recoup its losses by investing $3.7 billion in Goldman.

Matt Levine writes: You get the sneaking suspicion that there’s a terrible story here, that there’s a gambler’s-fallacy sense that, since you lost a lot of money on risky bets, the only thing to do is to put even more money on even riskier bets.
[…]
You see what’s going on there? Libya pays Goldman $3.7 billion and in return gets securities with “THESE SECURITIES ARE WORTH $5 BILLION” on the front of them. Guess how much those securities are worth? If you guessed $3.7 billion … there’s a decent chance that you’re too high? I dunno. If you guessed $5 billion you should be kept well away from money.

Libya said no; they “prodded Goldman to recoup their losses faster” and “also worried about whether it was wise to invest in Goldman given the collapse of Lehman.”

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A spate of banker suicides or a spate of reports on banker suicides?

e13-iconTrends are easy to spot when you go looking for them and conspiracy theorists are trend-spotters par excellence. The trouble is, a lot of these trends only exist in the eye of the beholder.

Following a “spate” of recent suicides among investment bankers — a possible early warning sign of another financial crisis — John Aziz asks:

[I]s it really abnormal for the finance industry to experience seven possible suicides in the space of a month?

Let’s do a back-of-an-envelope calculation. The U.S. has a suicide rate of about 12 people per 100,000 per year. Roughly 5.9 million people are employed in the American financial sector. Assuming the industry has the same suicide rate as the rest of the population — even with higher-than-average stress levels — one would expect 708 suicides in any given year, or nearly 60 per month in the U.S. alone.

Given that just three of the seven incidents (some of which may not have been suicides) occurred in the U.S., this suggests that the number is not excessive or unusual. Seven hundred suicides perhaps would be cause for raising eyebrows. Not seven.

So this “trend” is more of a case of bloggers and writers conspiracy-mongering without looking properly at the evidence.

The idea that suicides on Wall Street provide a metric for accessing the health of the economy can be traced back to the 1920s, but then as now, it turned out to be an urban legend:

Tall tales about panicked speculators leaping to their deaths have become part of the popular lore about the Great Crash. But although jumping from bridges or buildings was the second-most-popular form of suicide in New York between 1921 and 1931, the “crash-related jumping epidemic” is just a myth. Between Black Thursday and the end of 1929, only four of the 100 suicides and suicide attempts reported in the New York Times were plunges linked to the crash, and only two took place on Wall Street.

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Lawsuit accuses IBM of hiding China risks amid NSA spy scandal

Reuters reports: IBM Corp has been sued by a shareholder who accused it of concealing how its ties to what became a major U.S. spying scandal reduced business in China and ultimately caused its market value to plunge more than $12 billion.

IBM lobbied Congress hard to pass a law letting it share personal data of customers in China and elsewhere with the U.S. National Security Agency, in a bid to protect its intellectual property rights, according to a complaint filed in the U.S. District Court in Manhattan.

The plaintiff in the complaint, Louisiana Sheriffs’ Pension & Relief Fund, said this threatened IBM hardware sales in China, particularly given a program known as Prism that let the NSA spy on that country through technology companies such as IBM.

The Baton Rouge pension fund said the revelation of Prism and related disclosures by former NSA contractor Edward Snowden caused Chinese businesses and China’s government to abruptly cut ties with the world’s largest technology services provider.

It said this led IBM on October 16 to post disappointing third-quarter results, including drops in China of 22 percent in sales and 40 percent in hardware sales.

While quarterly profit rose 6 percent, revenue dropped 4 percent and fell well below analyst forecasts.

IBM shares fell 6.4 percent on October 17, wiping out $12.9 billion of the Armonk, New York-based company’s market value. [Continue reading…]

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Here’s why Wall Street has a hard time being ethical

Chris Arnade writes: My first year on Wall Street, 1993, I was paid 14 times more than I earned the prior year and three times more than my father’s best year. For that money, I helped my company create financial products that were disguised to look simple, but which required complex math to properly understand. That first year I was roundly applauded by my bosses, who told me I was clever, and to my surprise they gave me $20,000 bonus beyond my salary.

The products were sold to many investors, many who didn’t fully understand what they were buying, most of them what we called “clueless Japanese.” The profits to my company were huge – hundreds of millions of dollars huge. The main product that made my firm great money for close to five years was was called, in typically dense finance jargon, a YIF, or a Yield Indexed Forward.

Eventually, investors got wise, realizing what they had bought was complex, loaded with hidden leverage, and became most dangerous during moments of distress.

I never did meet the buyers; that was someone else’s job. I stayed behind the spreadsheets. My job was to try to extract as much value as possible through math and clever trading. Japan would send us faxes of documents from our competitors. Many were selling far weirder products and doing it in far larger volume than we were. The conversation with our Japanese customers would end with them urging us on: “We can’t fall behind.”

When I did ask, rather naively, if this was all kosher, I would be assured multiple times that multiple lawyers and multiple managers had approved the sales. [Continue reading…]

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The sociopaths on Wall Street

Robert Benmosche

Robert Benmosche

Paul Krugman writes: Robert Benmosche, the chief executive of the American International Group, said something stupid the other day. And we should be glad, because his comments help highlight an important but rarely discussed cost of extreme income inequality — namely, the rise of a small but powerful group of what can only be called sociopaths.

For those who don’t recall, A.I.G. is a giant insurance company that played a crucial role in creating the global economic crisis, exploiting loopholes in financial regulation to sell vast numbers of debt guarantees that it had no way to honor. Five years ago, U.S. authorities, fearing that A.I.G.’s collapse might destabilize the whole financial system, stepped in with a huge bailout. But even the policy makers felt ill used — for example, Ben Bernanke, the chairman of the Federal Reserve, later testified that no other episode in the crisis made him so angry.

And it got worse. For a time, A.I.G. was essentially a ward of the federal government, which owned the bulk of its stock, yet it continued paying large executive bonuses. There was, understandably, much public furor.

So here’s what Mr. Benmosche did in an interview with The Wall Street Journal: He compared the uproar over bonuses to lynchings in the Deep South — the real kind, involving murder — and declared that the bonus backlash was “just as bad and just as wrong.”

You may find it incredible that anyone would, even for an instant, consider this comparison appropriate. But there have actually been a series of stories like this. In 2010, for example, there was a comparable outburst from Stephen Schwarzman, the chairman of the Blackstone Group, one of the world’s largest private-equity firms. Speaking about proposals to close the carried-interest loophole — which allows executives at firms like Blackstone to pay only 15 percent taxes on much of their income — Mr. Schwarzman declared, “It’s a war; it’s like when Hitler invaded Poland in 1939.”

And you know that such publicly reported statements don’t come out of nowhere. Stuff like this is surely what the Masters of the Universe say to each other all the time, to nods of agreement and approval. It’s just that sometimes they forget that they’re not supposed to say such things where the rabble might learn about it. [Continue reading…]

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David Petraeus moves to Wall Street

Gawker: David Petraeus’ road to redemption has reached its gilded destination. As we first reported in April, the disgraced former CIA director will join Kohlberg Kravis Roberts, the private equity giant best known for “large debt-fueled corporate takeovers.”

How exactly does experience designing failed counter-insurgencies translate to an expertise in high finance? “As the world changes and we expand how and where we invest, we are always looking to sharpen the ‘KKR edge,’” cofounder and co-CEO Henry Kravis said of his new hire.

Petraeus will sharpen edges as chairman of the newly-formed KKR Global Institute, where his team will include Ken Mehlman, the former Bush campaign manager and onetime chairman of the Republican National Committee, who has been with KKR since 2008.

George Anders writes: Petraeus’s new job calls for him to get into the “thought leadership” business. As my colleague Halah Touryalai reports, his global institute is expected to address “macro-economic issues like the role of central banks in the world since the crisis, changes in public policy, and other areas where KKR has interests.”

In essence, KKR wants Petraeus, a former four-star general with a uniquely intellectual bent, to help establish the private-equity firm as a citadel of big-picture insights. That would be a welcome change for Kravis and Roberts, who doubtless have grown tired of endless allusions to “Barbarians at the Gate,” an archly titled account of KKR’s 1988 takeover battle for RJR Nabisco.

Blackstone has always had a bit of geopolitical cachet, thanks to founding partner Pete Peterson’s days as Commerce Secretary and his ongoing interest in fiscal policy and Social Security. Carlyle at one time had former President George H.W. Bush as an adviser, helping to buttress that firm’s image as deeply connected to the political realm. Now it’s KKR’s turn to try.

Such has become the nature of power in government: that “service to the nation” turns out to merely be a stepping stone to the advancement of self interest. Whatever Petraeus’ precise value to KKR turns out to be, he will be establishing himself within what has become a transnational system of governance in which representation is limited to the interests of shareholders and power can freely be exercised without democratic irritations like the need for accountability and transparency.

Right-wing nuts who arm themselves in fear of the creation of World Government don’t seem to have noticed that it’s already here — even if it’s more amorphous and less centrally organized than conspiracy theorists might imagine.

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Everything is rigged: The biggest price-fixing scandal ever

Matt Taibbi writes: Conspiracy theorists of the world, believers in the hidden hands of the Rothschilds and the Masons and the Illuminati, we skeptics owe you an apology. You were right. The players may be a little different, but your basic premise is correct: The world is a rigged game. We found this out in recent months, when a series of related corruption stories spilled out of the financial sector, suggesting the world’s largest banks may be fixing the prices of, well, just about everything.

You may have heard of the Libor scandal, in which at least three – and perhaps as many as 16 – of the name-brand too-big-to-fail banks have been manipulating global interest rates, in the process messing around with the prices of upward of $500 trillion (that’s trillion, with a “t”) worth of financial instruments. When that sprawling con burst into public view last year, it was easily the biggest financial scandal in history – MIT professor Andrew Lo even said it “dwarfs by orders of magnitude any financial scam in the history of markets.”

That was bad enough, but now Libor may have a twin brother. Word has leaked out that the London-based firm ICAP, the world’s largest broker of interest-rate swaps, is being investigated by American authorities for behavior that sounds eerily reminiscent of the Libor mess. Regulators are looking into whether or not a small group of brokers at ICAP may have worked with up to 15 of the world’s largest banks to manipulate ISDAfix, a benchmark number used around the world to calculate the prices of interest-rate swaps. [Continue reading…]

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Fallout from ‘Untouchables’ documentary: Another Wall Street whistleblower gets reamed

Matt Taibbi writes: A great many people around the county were rightfully shocked and horrified by the recent excellent and hard-hitting PBS documentary, The Untouchables, which looked at the problem of high-ranking Wall Street crooks going unpunished in the wake of the financial crisis. The PBS piece certainly rattled some cages, particularly in Washington, in a way that few media efforts succeed in doing. (Scroll to the end of this post to watch the full documentary.)

Now, two very interesting and upsetting footnotes to that groundbreaking documentary have emerged in the last weeks.

The first involves one of the people interviewed for the story, a former high-ranking executive from Countrywide financial who turned whistleblower named Michael Winston. You can see Michael’s segment of The Untouchables at around the 4:20 mark of the piece. The story Winston told during the documentary is essentially an eyewitness account of the beginning of the financial crisis.

When I spoke to him last week, Winston was still as amazed and repulsed by what he saw at Angelo Mozilo’s crooked subprime mortgage company as he was when he worked there. Winston, who had worked for years at high-level positions at companies like Motorola and Lockheed before joining Countrywide in the 2000s, described a moment in his first months at the company, when he rolled into the parking lot at the company headquarters.

“There was a guy there, a well-dressed guy, standing next to a car that had a vanity plate,” he said. “And the plate read, ‘FUND’EM.'”

Winston, curious, asked the guy what the plate meant. The man laughed and said, “That’s Angelo Mozilo’s growth strategy for 2006.” Here’s how Winston described the rest of the story to PBS – i.e. what happened when he asked the man to elaborate:

“What if the person doesn’t have a job?”

“Fund ’em,” the – the guy said.

And I said, “What if he has no income?”

“Fund ’em.”

“What if he has no assets?” And he said, “Fund ’em.”

Later on, Winston would hear that the company’s unofficial policy was that if a loan applicant could “fog a mirror,” he would be given a loan.

This kind of information is absolutely crucial to understanding what caused the subprime crisis. There are people out there still willing to argue that the government somehow “forced the banks to lend” to unworthy applicants. In reality, it was unscrupulous companies like Countrywide that were cranking out loans en masse, knowing that these loans would be unloaded down the line, first to banks and then to sucker investors like pension funds and foreign trade unions, almost as soon as they were created.

Winston was a witness to all of this. Eventually, he would be asked by the firm to present false information to the Moody’s ratings agency, which was about to give Countrywide a negative rating because of some trouble the company was having in working a smooth succession from one set of company leaders to another.

When Winston refused, he was essentially stripped of his normal responsibilities and had his corporate budget slashed. When Bank of America took over the company, Winston’s job was terminated. He sued, and in one of the few positive outcomes for any white-collar whistleblower anywhere in the post-financial-crisis universe, won a $3.8 million wrongful termination suit against Bank of America last February.

Well, just weeks after the PBS documentary aired, the Court of Appeals in the state of California suddenly took an interest in Winston’s case. Normally, a court of appeals can only overturn a jury verdict in a case like this if there is a legal error. It’s not supposed to relitigate the factual evidence.

Yet this is exactly what happened: [Continue reading…]

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Gangster bankers: too big to jail

Matt Taibbi writes: The deal was announced quietly, just before the holidays, almost like the government was hoping people were too busy hanging stockings by the fireplace to notice. Flooring politicians, lawyers and investigators all over the world, the U.S. Justice Department granted a total walk to executives of the British-based bank HSBC for the largest drug-and-terrorism money-laundering case ever. Yes, they issued a fine – $1.9 billion, or about five weeks’ profit – but they didn’t extract so much as one dollar or one day in jail from any individual, despite a decade of stupefying abuses.

People may have outrage fatigue about Wall Street, and more stories about billionaire greedheads getting away with more stealing often cease to amaze. But the HSBC case went miles beyond the usual paper-pushing, keypad-punching­ sort-of crime, committed by geeks in ties, normally associated­ with Wall Street. In this case, the bank literally got away with murder – well, aiding and abetting it, anyway.

For at least half a decade, the storied British colonial banking power helped to wash hundreds of millions of dollars for drug mobs, including Mexico’s Sinaloa drug cartel, suspected in tens of thousands of murders just in the past 10 years – people so totally evil, jokes former New York Attorney General Eliot Spitzer, that “they make the guys on Wall Street look good.” The bank also moved money for organizations linked to Al Qaeda and Hezbollah, and for Russian gangsters; helped countries like Iran, the Sudan and North Korea evade sanctions; and, in between helping murderers and terrorists and rogue states, aided countless common tax cheats in hiding their cash. [Continue reading…]

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Obama puts fox in charge of hen house at SEC

Matt Taibbi writes: I was shocked when I heard that Mary Jo White, a former U.S. Attorney and a partner for the white-shoe Wall Street defense firm Debevoise and Plimpton, had been named the new head of the SEC.

I thought to myself: Couldn’t they have found someone who wasn’t a key figure in one of the most notorious scandals to hit the SEC in the past two decades? And couldn’t they have found someone who isn’t a perfect symbol of the revolving-door culture under which regulators go soft on suspected Wall Street criminals, knowing they have million-dollar jobs waiting for them at hotshot defense firms as long as they play nice with the banks while still in office?

I’ll leave it to others to chronicle the other highlights and lowlights of Mary Jo White’s career, and focus only on the one incident I know very well: her role in the squelching of then-SEC investigator Gary Aguirre’s investigation into an insider trading incident involving future Morgan Stanley CEO John Mack. While representing Morgan Stanley at Debevoise and Plimpton, White played a key role in this inexcusable episode.

As I explained a few years ago in my story, “Why Isn’t Wall Street in Jail?”: The attorney Aguirre joined the SEC in 2004, and two days into his job was asked to look into reports of suspicious trading activity involving a hedge fund called Pequot Capital, and specifically its megastar trader, Art Samberg. Samberg had made suspiciously prescient trades ahead of the acquisition of a firm called Heller Financial by General Electric, pocketing about $18 million in a period of weeks by buying up Heller shares before the merger, among other things.

“It was as if Art Samberg woke up one morning and a voice from the heavens told him to start buying Heller,” Aguirre recalled. “And he wasn’t just buying shares – there were some days when he was trying to buy three times as many shares as were being traded that day.”

Aguirre did some digging and found that Samberg had been in contact with his old friend John Mack before making those trades. Mack had just stepped down as president of Morgan Stanley and had just flown to Switzerland, where he’d interviewed for a top job at Credit Suisse First Boston, the company that happened to be the investment banker for . . . Heller Financial.

Now, Mack had been on Samberg’s case to cut him in on a deal involving a spinoff of Lucent. “Mack is busting my chops” to let him in on the Lucent deal, Samberg told a co-worker.

So when Mack returned from Switzerland, he called Samberg. Samberg, having done no other research on Heller Financial, suddenly decided to buy every Heller share in sight. Then he cut Mack into the Lucent deal, a favor that was worth $10 million to Mack.

Aguirre thought there was clear reason to investigate the matter further and pressed the SEC for permission to interview Mack. Not arrest the man, mind you, or hand him over to the CIA for rendition to Egypt, but merely to interview the guy. He was denied, his boss telling him that Mack had “powerful political connections” (Mack was a fundraising Ranger for President Bush).

But that wasn’t all. Morgan Stanley, which by then was thinking of bringing Mack back as CEO, started trying to backdoor Aguirre and scuttle his investigation by going over his head. Who was doing that exactly? Mary Jo White. [Continue reading…]

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Secret and lies of the bailout

Matt Taibbi writes: It has been four long winters since the federal government, in the hulking, shaven-skulled, Alien Nation-esque form of then-Treasury Secretary Hank Paulson, committed $700 billion in taxpayer money to rescue Wall Street from its own chicanery and greed. To listen to the bankers and their allies in Washington tell it, you’d think the bailout was the best thing to hit the American economy since the invention of the assembly line. Not only did it prevent another Great Depression, we’ve been told, but the money has all been paid back, and the government even made a profit. No harm, no foul – right?

Wrong.

It was all a lie – one of the biggest and most elaborate falsehoods ever sold to the American people. We were told that the taxpayer was stepping in – only temporarily, mind you – to prop up the economy and save the world from financial catastrophe. What we actually ended up doing was the exact opposite: committing American taxpayers to permanent, blind support of an ungovernable, unregulatable, hyperconcentrated new financial system that exacerbates the greed and inequality that caused the crash, and forces Wall Street banks like Goldman Sachs and Citigroup to increase risk rather than reduce it. The result is one of those deals where one wrong decision early on blossoms into a lush nightmare of unintended consequences. We thought we were just letting a friend crash at the house for a few days; we ended up with a family of hillbillies who moved in forever, sleeping nine to a bed and building a meth lab on the front lawn.

But the most appalling part is the lying. The public has been lied to so shamelessly and so often in the course of the past four years that the failure to tell the truth to the general populace has become a kind of baked-in, official feature of the financial rescue. Money wasn’t the only thing the government gave Wall Street – it also conferred the right to hide the truth from the rest of us. And it was all done in the name of helping regular people and creating jobs. “It is,” says former bailout Inspector General Neil Barofsky, “the ultimate bait-and-switch.” [Continue reading…]

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U.S. Treasury exits AIG with bailout profit of $22.7 billion

Reuters reports: American International Group Inc said the U.S. Treasury will sell its last remaining stake in the company, giving a total profit to taxpayers of $22.7 billion on the bailout.

The Treasury is selling its last 234.2 million shares of AIG common stock for $32.50 per share, raising around $7.6 billion.

The Treasury said it had realized a positive return of $5 billion on the $182 billion bailout while the Federal Reserve had made $17.7 billion.

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Bankers still overpaid, says Morgan Stanley boss

The Guardian reports: The chief executive of the US investment bank Morgan Stanley has said Wall Street pay is still “way too high” and remuneration and jobs will have to be sacrificed to boost shareholder returns.

The comments by James Gorman, who took over the running of the bank in 2010, set him apart from longer standing peers who have always defended high pay as necessary for retaining key staff.

But Gorman told the Financial Times: “Compensation is way too high. As a shareholder I’m sort of sympathetic to the shareholder view that the industry is still overpaid.”

Morgan Stanley is cutting 4,000 jobs, 7% of its workforce, by the end of this year and the bank said it would consider more redundancies next year and pay cuts for the remaining staff.

Gorman said that in the past bankers’ pay had always increased with revenues, but never came down when revenues came down, as banks were so afraid of losing staff. “That’s a classic Wall Street case of ‘heads I win; tails you lose’. The current Wall Street management is a little tougher-minded about that and shareholders are certainly tougher-minded.”

His comments follow announcements from a string of European banks ceding to pressure from shareholders over pay. Deutsche Bank last month said it was cutting bonuses and would spend less of its revenue on pay. UBS said it was considering capping bonuses and linking them to the bank’s profitability. The Barclays chief executive, Antony Jenkins, said bonuses would be linked to the way staff did business, not just the revenues they generated.

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Nearing end of term, Obama’s snared no big Wall Street fish

McClatchy reports: Running for re-election, President Barack Obama frequently blames Wall Street and the deep financial crisis it caused for the underperforming economy. He doesn’t advertise that no major honcho of finance has been jailed under his watch for the mess, however.

The lack of a high-profile arrest and trial is all the more surprising given that Obama has tried to stain his Republican rival, former Massachusetts Gov. Mitt Romney, as a creature of Wall Street.

Past financial crises have always had antagonist. The savings and loan crisis of the late 1980s had banker Charles Keating. The CEO of collapsed energy trader Enron, Kenneth Lay, became the face behind a drive to revamp accounting laws in 2002. Both men were prosecuted for and convicted of financial crimes.

In the aftermath of the financial crisis of 2007-08 and the subsequent Great Recession, there’ve been plenty of scapegoats but no important actor fitted for pinstripes.

Why not? [Continue reading…]

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