by Larry Doyle, Sense on Cents
“The message is simple: Wall Street crime pays and there is no downside.”
Will there be another market crisis and if so what will precipitate it?
In what is an instant Sense on Cents classic, noted attorney and former SEC whistleblower Gary Aguirre takes us on a walk down the path that seems self-evident to me will cause our next market crisis.
Can you imagine if you discovered a businessman went about selling a product, collecting revenues on those sales, but never actually delivered the product sold?
Think that sort of fraud might attract the interest of the authorities? But what if the authorities, in this case our financial regulators, turned a blind eye to the practice?
Welcome to the world of naked short selling, aka selling counterfeit stock.
Gary Aguirre is like no other attorney in exposing fraud on Wall Street and the complicit behaviors of regulators charged with protecting investors. The 10-page commentary highlighted below runs in the October edition of Wall Street Lawyer and is an absolute MUST READ.
If you have 10 cents in the market, then take the 10 minutes to read Aguirre’s work. I can assure you the value of his insights will last a lot longer than that. Aguirre concludes:
It is hard to conceive how the Department of Justice, the USAO (US Attorney’s Office) or the SEC could have done more to encourage Wall Street executives – this generation and the next one – to concoct an even bigger fraud. The crisis brought the nation to its knees. No Wall Street executive has been prosecuted civilly or criminally. All were allowed to keep the billions in cash they received for delivering the crisis.
The message is simple: Wall Street crime pays and there is no downside. Sadly, the country may not be able to borrow its way out of the next crisis while still paying for the last one.
So do you think Dodd-Frank has reformed Wall Street? Really?