Good point
April 21, 2010 | alternatives, federal legislation, industry | Comments (0)Criminology Professor William Black says that Wall Street reform won’t stop fraud. From the Huffington Post piece:
Black sees what he calls “control fraud” at the heart of the financial crisis. “Control fraud,” he explained, “is when the people controlling a seemingly legitimate entity use the entity as a weapon to defraud.” It’s fraud committed by design, by the people at the top.
“WaMu is a control fraud,” he said, referring to the case of Washington Mutual Bank, the largest bank failure in history, where evidence suggests that executives knew about rampant fraud in their mortgage loans and didn’t stop it, allowing them to report higher profits and get bigger bonuses.
“Lehman is a control fraud,” he said, referring to the massive investment bank that went bankrupt after making a record numbers of mortgage loans based on little or no documentation (known as “liar’s loans”) and using accounting tricks to make the company look healthier than it was.
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