Wall Street Crooks, Thieves and Corruption

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Wall Street Crooks

Source: web

A startling rant made by one of the country’s most respected financial minds, Columbia University professor Jeffrey Sachs, probably has made him a few enemies at the mecca of the financial industry, especially considering he spoke of Wall Street crooks and criminal behaviors. Sachs pulled no punches, either during a VTC this week. He might have been angry, but make no mistake – he didn’t mince his words and he didn’t allow passion to get in the way of the message he was hell-bent on delivering – and that’s exactly what he did. Here’s just a bit of what he spoke of – in that impressively clear, definitive and convincing voice, mind you.

Wall Street Crooks

Sachs says Wall Street is little more than a gathering of crooks who are involved in insider trading, corruption and other criminal behaviors. He also said nothing’s changed since the recession and worse, these Wall Street crooks and others that even care: they’re too busy riding the wave while they can. Sachs said since the financial crisis began in 2008, there were repeated calls for better compliance guidelines and unfortunately, they were all ignored. This “greedy game” that they play, explained Sachs, is what led us to the collapse that we’re still not recovering from.

But Sachs also has a few words about the Obama Administration. He claims that the U.S. has “a docile president, a docile White House and a docile regulatory system that absolutely can’t find its voice.” This all culminates into “prima facie criminal behavior,” he said.

The insider trading, the financial fraud and corrupt politics are occurring “on a very large extent,” he explained in live remarks during a video teleconference from his offices in New York. He was emotional, precise and definitive in his choice of words to ensure the message was received with absolutely no misinterpretations.

We have a corrupt politics to the core, I am afraid to say, and…both parties are up to their neck in this. This has nothing to do with Democrats or Republicans,

he continued. The conference, “Fixing the Banking System for Good”, has never been so interesting.

A Stunned and Captivated Audience

It didn’t take long to stun the attendees into silence. Some said they felt the passion in his voices, others said they were amazed that someone finally said it and that they were there to actually witness it. Dennis Peacocke, head of Strategic Christian Services, a religious group that advocates on topics of economic and social justice, was in attendance and said,

There was an initial shudder, is how I would describe it, because they could feel the passion that was in the discussion…(his) comments were full of conviction. I was applauding him for bringing values and ethics into the discussion.

But what does Sachs think about the politics and whether it’s fraught with corruption? He believes it’s a cess pool that no one in politics hasn’t at least dipped their toes into and most have jumped right in. He reminded attendees that the total political contributions from Wall Street easily exceeded more than $271 million. Part of this could be the efforts by the banking industry to get Mitt Romney elected. Romney had promised to overturn the new financial laws, including Dodd Frank, the CFPB and the 2009 CARD Act. Of course, Obama went in for a second term, so those who did contribute to get Romney elected basically gambled and lost.

Morals

Morals, or rather, the lack of, he says, plays a huge role in the goings-on in the financial sector. The moral environment is toxic and pathological,

And I am talking about the human interactions…I’ve not seen anything like this, not felt it so palpably.

Greed

Greed is rampant as well and the ones on Wall Street are focused on making as many millions of dollars as possible and that there’s not anything that will stop them. He said they pay no attention to owning up to their tax responsibilities, they feel no loyalty to their clients and people are chess pieces.

They are tough, greedy, aggressive and feel absolutely out of control in a quite literal sense, and they have gamed the system to a remarkable extent.

Just when it seemed he was finished, he then began naming names and it really got interesting at that point. A few of those specifics included accusing John Paulson, who is best known for his hedge funds, of working with Goldman Sachs to repeatedly defraud European banks that continued to buy every toxic mortgage he put in front of them. He said the punishment doled out by the SEC included what was nothing more than pennies in fines.

The $550 million he was ordered to pay a couple of years ago was painless for the wealthy hedge fund titan. Further, he said Paulson wasn’t even mentioned during legal proceedings when he was one of the primary players. He then went on to accuse one-time US Treasury Secretary Larry Summers of taking deliberate steps to derail efforts for limits placed on banks. He reminded attendees that it was the American consumer that shouldered all of those massive costs and that people like Summers have a high responsibility for what ultimately happened.

Inspiring

At this point, to most folks, it’s moot as to why Sachs would use that platform to tear into the entire financial sector. The fact that someone finally did it is what is so inspiring. Peacocke, for one, is pleased with his decision to reveal, with no efforts of biting his tongue, the core of what defines Wall Street. The question now is whether there will be blow-back on Sachs? It’s not likely – our guess is those who have something to hide are too busy doing just that: hiding. Besides, it’s doubtful anyone would intimidate him anyway. It was a gutsy move.

What are your thoughts? Do you believe Sachs hit the target or did he take an unfair advantage and hijack a meeting that could have been better served looking for solutions? Do any of his comments ring true to you?

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About Author

David is a CPA and has spent the past decade as a financial adviser helping clients meet their fiscal objectives. With an appreciation for journalism, he has spent the past few years overseeing several financial columns as well as writing two previous finance blogs. He resides on the East Coast with his wife and two sons and has guided many through the recent recession while providing a no-nonsense approach to spending and saving.


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