Going After the Market Mobsters

Jesse Eisinger from ProPublica, via the NY Times, reminds us again how culpable big brokerage firms, and their employees, were for the late, unlamented, financial catastrophe.

On March 16, 2007, Morgan Stanley employees working on one of the toxic assets that helped blow up the world economy discussed what to name it. Among the team members’ suggestions: “Subprime Meltdown,” “Hitman,” “Nuclear Holocaust” and “Mike Tyson’s Punchout,” as well a simple yet direct reference to a bag of excrement.

Ha ha. Those hilarious investment bankers.

Then they gave it its real name and sold it to a Chinese bank.

… documents suggest a pattern of behavior larger than this one deal: people across the bank understood that the American housing market was in trouble. They took advantage of that knowledge to create and then bet against securities and then also to unload garbage investments on unsuspecting buyers.

NY Times

Let’s hope that the new Chair of the SEC, Mary Jo White –as proposed by President Obama– will go after these corporate mobsters as hard as she did John Gotti when she was United States Attorney in New York.

NY Times

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