Another Slap On The Wrist
In Chapter 16 of my book, and in many interviews and speeches these last several years, I’ve stated the following:
“Another example of the financial industry making money the old-fashioned way was the sub-prime mortgage fiasco which took place less than a decade ago. It was, in my opinion, the greatest financial crisis in our country’s history and a major cause of the recession of 2007-09. Hundreds of billions of dollars, if not a trillion or more, were lost because financial institutions around the world (led by U.S. firms) sold mortgage-related products that they knew would fail. Furthermore, the financial institutions actually took the other side of the sale.
I truly believe the general public’s lack of understanding of these transactions (or should say, transgressions) is the reason that not one high-ranking official of any financial institution was found guilty of these criminal acts. What occurred in the sub-prime mortgage crisis would be like if GM, Ford and Chrysler had sold cars that they knew would crash and then bought life insurance on the new owners so when they crashed and died, the car companies could profit twice. Trust me, if this was on the news tonight, the public would be up in arms and the car company executives would be going to jail. Yet, that is what happened, and almost none of the financial execs involved are being held legally accountable.”
Despite what turned out to be widespread fraud that led to hundreds of billions of dollars in ill-gotten gains, another financial firm who were active participants in what almost brought the world to its knees, got off with little more than a slap on the wrist.
“In the movie ‘Wall Street’ I play Gordon Gekko,
a greedy corporate executive who cheated to profit
while innocent investors lost their savings.
The movie was fiction, but the problem is real.”
– Michael Douglas