Wall Street Has Been Performing Criminal Acts Ever Since

During this point, speculation was the investment of selection, resulting in the Panic of 1792. Former Continental congresswoman William Duer raised giant sums of cash to take a position in bank stock and government securities, novel and financially subtle assets whose risks several contemporaries did not perceive. Duer presently defaulted on his debts, destroying the savings of the many middle- and working-class folks. the following panic caused riots and reignited law-makers dialogue over a bankruptcy law that might finally manufacture the Bankruptcy Act of 1800 when the Panic of

“Wall Street is broken for sure because it succumbed to greed and corruption and pure speculation with no values.” (Deepak Chopra).Wall Street, being made of people and resources with a lot of money, there are many ways that temptation can become overpowering. With the people working for Wall Street corporations, they face the challenges of making decisions based on what could benefit them most, rather than what is the best option that could benefit more people. Some of these decisions that have been made according to society have some short term benefits, but more often than not, these benefits don’t last as long as hoped. When people succumb to the temptation of greed, the long term effects of those decisions may become negative.

Lewis focuses the book from the perspectives of leaders from three investment firms that saw the future of the financial market and its inevitable collapse in the early 2000’s. Though given the opportunity, these men were not heroes. Instead of spreading the news and rebelling against Wall Street for infecting the market, they were more interested in making a profit. Michael Burry was focused on his company Scion Capital and buying credit default swaps to make both him and his investors’ money. Charlie Ledley and Jamie Mai focused on betting against Wall Street and ultimately in the end made fortunes.

Since 1869, the investment banking firm Goldman Sachs has been working to satisfy their customer’s financial needs. In 2008 the firm played a large role in causing the devastating market crash that negatively affected millions of families around the world. At the heart of the cause of the depression, Goldman Sachs took certain steps to make sure they profited, but unfortunately it was at the expense of the market and the public. Just before the market crash, the company blatantly acted in a manner inconsistent to their code of ethics as well as the standards governing their industry.

New York Times reported that a small merchant in the Bronx went to a branch of the Bank of United States and asked to sell his stock in the institution. When told the stock was a good investment and advised not to sell, he left the bank and began spreading rumors that the bank had refused to sell his stock. Within hours, a crowd had gathered outside the bank, and that afternoon between 2,500 and 3,500 depositors withdrew a total of $2 million in funds.

In The Wolf of Wall Street Jordan Belfort tells the tale of his rise and fall of his stockbroking career at his firm, Stratton Oakmont. He talks of all-night parties, drug benders, and women everywhere he went. He also speaks of the millions of dollars he made through “pump and dump” schemes in which he would defraud investors and the high-pressure sales tactics used by his team. In The Wolf of Wall Street Jordan Belfort argues greed and the unabated pursuit and acquisition of money leads to vice and excess, which holds true, because human nature leads people to harm others in pursuit of the almighty dollar.

This paper will be concentrated on the stock market and a few different people that gained tremendous wealth and power from it. Jordan Belfort, Bernard Madoff, and the Enron Company are prime examples of people who had acquired both wealth and power all coming through the stock market, but not exactly legally through the entirety of their careers. In multiple cases, unfortunate events and choices that took place in their lives led to the loss of a tremendous amount of money for a lot of people, which eventually led to their downfall.

Michael Lewis’s novel, Flash Boys, gives an in depth look at the corruption that has occurred in the U.S financial system since 2008. With a focus on high frequency trading (HFT), Lewis shows how a group can bend and twist regulations, and find loopholes in the market at the cost of the American investor. However, Lewis stresses that this this could not be done without major collusion within the financial system. HFT could not have held such a deep grasp on the market without help from the banks, their dark pools, and the people who are entrusted to run the U.S markets, the exchanges. Flash Boys shows, through the stories of Brad Katsuyama, Sergey Aleynikov, and everyone who helped create IEX, that there are solutions to these criminal acts

By 1717 John Law had gone from being a murder on the run to being a man of wealth and power. Yet, his rise to power would also be his demise as he was responsible for the first stock market crash in recorded history. Laws acquaintance with the Duke of Orleans had essentially made him the second most powerful man in France. He had acquired what is known as the Mississippi Company which had a monopoly on trade with French Louisiana and eventually monopolized all French trade outside of Europe. In an attempt to restructure the national debt, shares of the company were sold. As the stock price rose more paper money had to be printed. People of all backgrounds were rushing to buy these shares and were becoming enormously wealthy overnight.

In today’s society crime occurs everyday across all aspects of life. One particular crime is that of white collar and corporate level crime. It is important that we as a society study this type of crime in depth because many individuals believe that white collar and corporate level crimes are victimless crimes when in reality they have the potential to destroy major corporations and economies all with one single case. The news or media rarely talk about this type of crime because it is often difficult to understand and individuals typically lack interest in these types of cases. One particular case is that of Jordan Belfort. Dubbed the infamous “Wolf of Wall Street” Jordan Belfort is a former stockbroker who robbed investors of over $200 million dollars to create his wealth through “pump and dump” schemes, insider trading, money laundering securities fraud, and stock-market manipulation. As an attempt to further understand these complex cases I will break down Belfort’s case as far as the methods and means as to how he got started, his use of “pump and dump” schemes and other means as to how he acquired his wealth. In addition to this I will discuss the sanctions and disciplinary action that Jordan Belfort was given, how the case affected society and what new regulations were

Over the next decade Mr. Stanford, directly assisted by James M. Davis, Stanford International Bank’s CFO, and Leroy King, Antigua’s chief banking supervisor, executed a massive Ponzi scheme. In addition, Laura Pendergest-Holt, the chief investment officer of Stanford Financial Group (“SFG”) and a member of SIB’s investment committee, gave credence to the fraudulent scheme by misrepresenting herself to investors and to the firm’s financial advisers claiming that she oversaw SIB’s entire investment portfolio and employed a sizeable team to invest in conservative and liquid assets.

To an audience of students at the University California, Berkley, Ivan Boesky at once stated, “Greed is all right, by the way. I think greed is healthy. You can be greedy and still feel good about yourself (Homans, 2012, p.1; Kay, 2003, p.1).” Greed is what lead Boesky to Insider Trading and ultimately huge illegal profits and the scam he created was hidden in plain sight. Boesky wanted everyone to believe that he was doing the world a service, but he was actually stealing (Homans, 2012). Ivan Boesky was considered to be a leading man on Wall Street during what James Stewart called the “Greed Decade” of the 1980’s, and Boesky’s specialty was insider trading (Stewart, 1991, p. 15). Ivan Boesky and the insider trading cases of the 1980s are very significant white-collar crimes as companies and communities were directly impacted; they were torn apart due to the leverage buyout era Boesky orchestrated with the help of his corporate raiders. (Meserve, 2012) In addition, the cases of the 1980s would be the first time the SEC got tough on insider trading, and Ivan Boesky was the window into the securities frauds of the era (Stewart, 1991).

The unethical traders are not the only factor to causes the financial crisis. They are playing an important role along with other factors and further encourage the financial crisis to arise. The unethical traders exist in the asymmetric information problems, and their unethical activities cause the asymmetric information problems even worse in the financial market. Once the asymmetric information problems is severe enough in those factors, the financial market collapse. For the 6 main factors of causing the financial crisis are the followings: 1) Asset markets effects on balance sheets; 2) Deterioration in financial institutions’ balance sheets; 3) Banking crisis; 4) Increases in uncertainty; 5) Increases in interest rates; 6) Government fiscal imbalances.

The two stories talk about the meteoric price surge in the stock of a company called Cynk Technology Corporation, with no actual revenue and tangible assets, and the purported manipulation of the stock price through a “pump and dump” strategy. It can be seen how the Securities and Exchange Commission together with the Department of Justice opened an indictment charging several people with conspiracy, tax fraud and money laundering involving up to $500 million in assets routed through offshore shell corporations that allowed clients to influence stock prices and hide their gains. Generally, the fraudsters take control of an enterprise and offer to sell a chunk of shares usually to the unsuspecting public with promises of very high returns. Promoters broadcast the company’s prospects by telling financiers to get in early before the rest of the market dives in — the pump. Shares are often bought and sold between fraudsters to give the appearance of active trading, further amplifying interest as brokers contact clients to buy the stock. Once the price starts rising, the control block can be dumped on the market, leaving investors with shares in a nearly worthless business (Bouraoui, Mehanaoui & Bahli, 2012). It also parleys the increase of penny stock fraud and the Securities and Exchange Commission’s inability to prosecute the fraudsters and protect investors.

It’s amazing the amount of financial scandals there has been happening during the past decade, most of them from the financial banking system. Reckless management practices that try to lure the public with false statements in order to fill up their own pockets. Scandals such as, the Bernie Madoff with his ponzi scheme, The Libor Scandal with the fixed rates, as well as the famous scandal of the Lehman Brothers, all of them were great acts of corruption and unethical behavior, trying to abuse of the public position for private gain.