An Average Day on Wall Street

One day’s financial fraud stories from the New York Times.

  • Bear Stearns Debacle
    • In the spring of 2007, as the mortgage market came unglued, two Bear Stearns executives shared their growing fears in a series of e-mail messages to each other about the perilous condition of the giant hedge funds they oversaw. “I’m fearful of these markets,” one wrote. The other said later, “Believe it or not — I’ve been able to convince people to add more money.” He concluded that “I think we should close the funds now.”

      But three days later, the pair, Ralph R. Cioffi and Matthew M. Tannin, presented an upbeat picture to worried investors without disclosing that the two funds were plummeting in value and that Mr. Cioffi had already pulled some assets from one of them.

      A little more than a month later, the funds, filled with some of the most explosive and high-risk securities available, imploded, evaporating $1.6 billion of investor assets and setting off a financial chain reaction that has rattled global markets, caused more than $350 billion in write-downs.

  • UBS Tax Evasion Scheme
    • One after another, the secrets spilled out. The millions stashed in Swiss bank accounts. The precious jewels and artwork whisked into hiding. The diamonds smuggled in a tube of toothpaste. Bradley C. Birkenfeld kept all those secrets and more as he discreetly managed the fortunes of American millionaires and billionaires at UBS, the Swiss bank.
  • Fugitve Hedge Fund Manager
    • Federal authorities have arrested a suspect in the disappearance of Samuel Israel III, the fugitive former manager of the Bayou hedge fund who they say faked his suicide on the day he was to report to prison last week and is now believed to be on the run.

      Mr. Israel, the scion of a prominent New Orleans family with a long history in the commodity business and on Wall Street, pleaded guilty in 2005 to defrauding investors of more than $400 million in his Bayou hedge fund.

Is it just my imagination or are we returning to the days of Enron and Worldcom?

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0 Responses to An Average Day on Wall Street

  1. Ken Ballweg says:

    Jon, When did we leave that world??

    These folks make the robber barons look like a warm up act.

  2. Ken Ballweg says:

    Jon, When did we leave that world??

    These folks make the robber barons look like a warm up act.

  3. perp walks and SOX just moved the cockroaches to less regulated industries. There’s no shortage of those.

  4. perp walks and SOX just moved the cockroaches to less regulated industries. There’s no shortage of those.

  5. JR says:

    The top 1% act like teenagers. They are untouchable and impervious to any dangers. They take any risk because nothing can harm them.

    And they have no idea how much the other 99% are hurting.

  6. JR says:

    The top 1% act like teenagers. They are untouchable and impervious to any dangers. They take any risk because nothing can harm them.

    And they have no idea how much the other 99% are hurting.

  7. etown says:

    are you kidding? we never left the days of enron and worldcom. yay capitalism!!

  8. etown says:

    are you kidding? we never left the days of enron and worldcom. yay capitalism!!

  9. John Hurt says:

    President Enron

  10. Dan says:

    It’s not that they don’t know. It’s that they don’t care. You can show them people wiped out by their recklessness and they’ll scoff and say, “Did somebody put a gun to this guy’s head when he invested? Did anybody make him any guarantees that he wouldn’t lose his money?”

    Except at sentencing time, when they will weep and gnash their teeth and tear their hair and oh, if only, if only they could turn back time and right the wrongs they have done to their innocent victims, alas!

  11. mike says:

    Why should they care? At the end of the day they still go home to their fancy cars and vacation homes and millions in the bank. Guys like this never serve any time, or get served any sort of justice, no matter how many people they screwed over. I’m sure “the market” will make sure everything works itself out, though, right?

  12. Brian says:

    I second the notion, we never left. Greed is also in and it’s limited to capitalism. The Soviets in charge were just as greedy as any Wall Street hotshot.

  13. Steve says:

    President Enron, John? Is that an attempt to disparage Bush? Because he was buddies with Ken Lay? The fact is Enron’s (and Worldcom’s) illegal activites occurred mostly during the Clinton administration. Despite their friendship Bush did nothing to prevent the prosecution of the guilty parties. Maybe you should give Bush credit for implementing some positive changes (Sarbanes-Oxley, etc.). The fact that these people are being investigated and arrested is good news.
    I agree with other commenters that not much has changed since those scandals of yesteryear. However, that is not a reason to bash capitalism or the richest 1% of folks. There are thieves at all levels of society. Capitalism has it’s flaws, but I’ll take it over Socialism any day.

  14. Dan says:

    Bush implemented Sarbanes-Oxley? It was his idea? He proposed the legilsation? He was the driving force behind it?

  15. Azmanon says:

    An average day, maybe not, but no matter how dark a shadow is cast on the current crop of executive greed mongers, I still doubt things will change easily. Weather or not these gamblers get prosecuted or exiled to their offshore havens, there will still be droves of people who aim high and risk everything to take their place.

    Many will continue to do so as long as Wall Street offers its high stakes incentives, much like casinos of Vegas will keep their doors open as long as the city can remain an island metropolis in the barren desert.

    I would prefer to wake up in the morning and shed layer of skin, much like I did around 1992, wondering how one pillar of the modern world (capitalism) could stand when the other (socialism) had collapsed, when returns on investments began dwindling as fast as virtual markets propagated prosthetic organs for the free market life support infrastructure that has sustained us for two miraculous decades.

    Now if there was only a prozac for our crumbling antiseptic machine… either that or we face cold turkey sweat, hands to the earth, change.

  16. Steve says:

    Yes, Bush implemented SOX. He signed it into law. The driving force behind it was the corporate scandals of Enron, Worldcom, etc. Bush rightly called that law “the most far-reaching reforms of American business practices since the time of Franklin D. Roosevelt”. Further, I think he knew that this legislation would be very costly and be a factor in slowing down the growth of the economy. Yet he did it anyway because he thought it was the right thing to do (or maybe it was just the politically expedient thing to do, either way I give him credit). This administration has done a lot of things very wrong, but unlike most liberals, I don’t hate Bush so much that I can’t acknowledge what he’s done right.

  17. Another Jon says:

    Steve….that is a good idea. I would be interested in reading a list of things George W. Bush has done well.

  18. John Hurt says:


    Please stop projecting your preconceptions onto me. I’ve been very polite to you.

  19. John Hurt says:

    And by the way, I don’t know anyone who hates (as you wrote) Bush more than conservatives, especially Texan conservatives. I personally don’t hate Bush. Here is something good he did. He, at Bono Vox’s urging, provided a lot of aid to Africa.

  20. Melissa Goldstein says:

    John Hurt>

    Believe it or not, but that might not actually belong in the “something good” category.

    This article, “Economic Emancipation: Ghana, Africa, the World: Debt “forgiveness” and the financial assault on Third World countries” is worth a read:

    If people are upset because the Iraq war isn’t about freeing Iraqis so much as securing their oil, then people should be just as upset about so-called “aid to Africa.” Unfortunately, without the deaths of a lot of American troops to draw attention to what’s going on in Africa, it’s not likely that this issue will ever make it into the mainstream media.

  21. rhb says:

    We may be returning but my feeling is that it will be a lot different this time around because Bush/McCain won’t be the ones seeing this through. Obama will.

    Meanwhile, does this strike anyone else with its close to the election positioning. Gosh sakes and land o goshen, hon, they’ve saved us again. Maybe those Republicats aren’t so bad afer all?

  22. John Hurt says:

    Now here is something Bush did that is extremely bad.

    Retired General Taguba: Bush Administration Committed War Crimes

    “There is no longer any doubt as to whether the current administration has committed war crimes. The only question that remains is whether those who ordered the use of torture will be held to account.”

    “Our national honor has been stained by the indignity and inhumane treatment these men received from their captors.”

    Retired General Taguba in the forward to a Physicians for Human Rights study.

  23. Dan says:

    Signing legislation into law is not the same thing as being the driving force behind it.

    He signed it into law because it was that, or have it forced on him. If you give him credit for that, then do so. I don’t.

    I don’t hate Bush, I hate his policies. I despise him as a bully and a weak-minded fool (not to mention a person who has the rhetorical skills of Goober Pyle), but I don’t hate him. One of the most amusing things about the rising panic of the right is their hysterical insistence that people have an irrational hatred of Bush. After the Lewinsky witchhunt, that’s rich.

    Hang tags like “liberal” on me all you want, Steve. Like the word “stupid,” it’s just sticks and stones.

  24. Jon Taplin says:

    Steve- If you look at the budget’s the Bush administration provided for the SEC investigations unit, you will see their real intent. They have cut back this unit every year. The choice is not between Capitalism and Socialism. The choice is between regulated capitalism and unregulated capitalism. It’s that simple.

  25. Rick Turner says:

    Regulated capitalism is not a good thing for those currently in power in the executive branch of our government.

  26. Steve says:

    John Hurt – my apologies for projecting my preconceptions on you. It won’t happen again. And also to Dan for name calling. I’ll try to be more polite.
    My feelings have nothing to do with a rising panic, but I do think a lot of people have an irrational hatred of Bush. And I said the same thing about our previous president a decade ago. I think calling Bush “President Enron” is a bit irrational when it appears to me that he was more involved in cleaning up that scandal as opposed to creating it. I think calling for Bush to be arrested for war crimes is irrational. Those types of statements come primarily from people I would describe as liberal in my opinion. It seems to me to stem from a hatred of the man, but I’ll take you for your words that you hate his policies and not him.

  27. John Hurt says:

    I was just joking around Steve. Completely irrationally. I am, in fact, an irrationalist.

    But that doesn’t make me a bad person.

    And I didn’t call Bush President Enron. I merely wrote President Enron. You supplied the Bush part. The war crimes tip came from General Antonio Taguba who led the Army’s official investigation into the Abu Ghraib scandal. I don’t know if he has called for Bush to be arrested for war crimes (I think you supplied that as well) but if he did so, I don’t think it would be because he was being irrational.

    Description of Straw Man

    The Straw Man fallacy is committed when a person simply ignores a person’s actual position and substitutes a distorted, exaggerated or misrepresented version of that position. This sort of “reasoning” has the following pattern:

    Person A has position X.
    Person B presents position Y (which is a distorted version of X).
    Person B attacks position Y.
    Therefore X is false/incorrect/flawed.


    Here is something I think you might find interesting:

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