My last post describes how five disgraced Wall Street
bankers, who are largely responsible for the Great Recession, are living lives
of “quiet luxury.”
An article by The Center for Public Integrity describes how
the five enjoy their mansions and playing golf, skiing, and tennis. One hires
players to help him compete in bridge tournaments.
Continuing its series “After the Meltdown,” the center
describes in its second article how the ex-Securities and Exchange Commission
chief now helps companies navigate post-meltdown reforms.
On March 11, 2008, Christopher Cox, former chairman of the
SEC, said he was comfortable with the amount of capital that Bear Stearns and
the other publicly traded Wall Street investment banks had on hand, according
to the center. Days later, Bear was gone and by the end of the year, all five
banks supervised by the SEC were either bankrupt, bought, or converted to bank
holding companies
Cox now helps banks and other companies navigate the
new rules that the crisis created, the center said. Other former top regulators
– such as Hank Paulson, Timothy Geithner, and Sheila Bair – have written books
based on their experience and joined the lecture circuit. John Reich has
retired since his agency, the Office of Thrift Supervision, was eliminated.
Federal Reserve Chairman Ben Bernanke is the only top regulator still on
the job, and he’s expected to leave his position soon.
Critics quoted in the article said the SEC was “more of a
barrier” in bringing enforcement action.
In the third article in its series, the center reports that
subprime lending executives are back in business five years after the crash.
Many are developing new loans that target borrowers with low
credit scores and small down payments. They’re creating non-bank mortgage
companies, which have less stringent regulations than banks.
Many of these questionable mortgage players have also been
able to keep their mansions, investments, and riches.
Dan Alpert,
managing partner with the investment bank Westwood Capital LLC, says there’s a
reason why the same players keep getting back in the game: There was no
meaningful effort by the government to identify bad actors and hold them
accountable, the center said.
Be sure to read these three articles in the center’s series.
It’s absolutely amazing that there are so many complaints about excessive
government regulations when the opposite is occurring. New mortgage companies are being set up that are
using the same unscrupulous practices that led to the housing crisis and the
Great Recession.
Reading about the luxurious lifestyles by disgraced bankers
and former subprime lenders, who are becoming subprime lenders again, is
incredible. This is information consumers need to know.
