Wall Street Payback
Wall Street Payback
Roger Parloff, "Wall Street: Itâs Payback Time," Fortune, January 6, 2009.
http://money.cnn.com/2009/01/05/news/newsmakers/parloff_payback.fortune/index.htm (Links to an external site.)
Along with the infamous $700 billion bailout, the government may give Wall Streetâs shamed investment bank CEOs something they donât want â criminal charges. In the wake of the national credit crisis that has ravaged businesses the world over, the question of whom to blame for the current economic woes remains unsure. Though many factors caused this financial calamity, the high level executives at investment banks like Lehman Brothers and Bear Stearns played a major role in exacerbating the situation to its current crisis level. So the question is not who to blame, but how to blame them in a court of law.
But the case against the investment bank CEOs is not as concrete as the cases against other Wall Street frauds like Bernie Madoff or Enronâs Jeff Skilling. The former are being criticized for giving rosy, reassuring statements to investors and the press about the future of their firms even though their financial house of cards was ready to collapse. Prosecutors, however, will need more evidence to prove these CEOs were breaking the law. They need solid, unambiguous examples of intentional wrongdoing that can be distilled to three jury-friendly principles â lying, cheating and stealing.
Though the investment banks almost definitely participated in the first of that terrible trio, the other two are more difficult to prove. Even outrageous events like the loss of billions of dollars in only a matter of days by Bear Stearns is not a criminal offense since it is not illegal for a business to lose money, no matter how vast the amount. Investment bank CEOs may even be able to dodge the charge of lying to investors by claiming ignorance of just how bad the credit crunch had hurt their business. Only time and trials can tell if these once mighty executives will fall because of their misleading actions.
Should the government pursue legal action, or perhaps even criminal charges against these top executives? Is it more important to pass legislation to prevent such problems from happening again in financial markets?
Wall Street Payback
Wall Street Payback
Roger Parloff, "Wall Street: Itâs Payback Time," Fortune, January 6, 2009.
http://money.cnn.com/2009/01/05/news/newsmakers/parloff_payback.fortune/index.htm (Links to an external site.)
Along with the infamous $700 billion bailout, the government may give Wall Streetâs shamed investment bank CEOs something they donât want â criminal charges. In the wake of the national credit crisis that has ravaged businesses the world over, the question of whom to blame for the current economic woes remains unsure. Though many factors caused this financial calamity, the high level executives at investment banks like Lehman Brothers and Bear Stearns played a major role in exacerbating the situation to its current crisis level. So the question is not who to blame, but how to blame them in a court of law.
But the case against the investment bank CEOs is not as concrete as the cases against other Wall Street frauds like Bernie Madoff or Enronâs Jeff Skilling. The former are being criticized for giving rosy, reassuring statements to investors and the press about the future of their firms even though their financial house of cards was ready to collapse. Prosecutors, however, will need more evidence to prove these CEOs were breaking the law. They need solid, unambiguous examples of intentional wrongdoing that can be distilled to three jury-friendly principles â lying, cheating and stealing.
Though the investment banks almost definitely participated in the first of that terrible trio, the other two are more difficult to prove. Even outrageous events like the loss of billions of dollars in only a matter of days by Bear Stearns is not a criminal offense since it is not illegal for a business to lose money, no matter how vast the amount. Investment bank CEOs may even be able to dodge the charge of lying to investors by claiming ignorance of just how bad the credit crunch had hurt their business. Only time and trials can tell if these once mighty executives will fall because of their misleading actions.
Should the government pursue legal action, or perhaps even criminal charges against these top executives? Is it more important to pass legislation to prevent such problems from happening again in financial markets?
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