Why Corporate Fraud Is So Rampant

There’s an interesting article on cnbc.com: Why Corporate Fraud Is So Rampant: Wall Street’s Cop by Preet Bharara, United States Attorney for the Southern District of New York.

Former hedge fund manager, billionaire Raj Rajaratnam, who was found guilty of conspiracy and securities fraud

A quick recap of the article:

… To the apparent surprise of many in the room, I observed publicly that insider trading appeared to be rampant…. has permeated numerous industries, sectors, and geographical regions…… most educated, successful, and moneyed professionals in the country put their companies — not to mention their own liberty — at risk by engaging in flagrant and foolhardy illegal conduct…

The author then proposes solutions that are simply not going to work. For example, hiring managers should insist on the importance of integrity; they must look for it and they must screen for it.

To arrive at a workable solution, we must take a step back and study the problem, investigate the underlying fundamentals. Once we do that we can see that the above issue is a manifestation of changed reality. I assure you that I am no socialist. So please give me a benefit of doubt and read my argument in totality…

The changed reality is that this country is no longer a land of opportunities for all. (It was never a land of opportunities for African-Americans but let us park that issue.) Opportunities are now reserved only for the rich; there is no chance in hell that poor people can make it in a generation or two. Apart from a lucky few here and there, one needs to be ‘born big’ to make it big in this country.

The famed American dream is now reserved only for a select few.

How is this changed reality relevant to the problem of insider trading? It is not clear unless you take into account a fundamental characteristic of Americans.

Americans love money, they worship money, they respect money. Of course there is nothing wrong with this; it is precisely this characteristic that enabled this country to make such huge progress in such a short period of time.

American problems started when American love for money intersected with opportunities for few. It has created a sense of entitlement among a certain class. The members of this class think that it is their right to gather money and they are not accountable to anyone. It is this arrogance that leads to such unethical behavior. When you take into account this changed reality, you will get a handle on much of the issues that this country is facing — think it over.

Now that we have looked at the fundamentals, can we arrive at a workable solution? I believe so.

As I said earlier, I am not socialist and I am not advocating taxes on the rich and increased benefits for the poor. I am not at all asking for a European solution to the problem.

All I am asking for is affordable education for all. This is a great equalizer and it will bring back the American dream. Access to education will enable every American to prove his or her worth, and it will give each person access to opportunities.

If we provide this equalizer then the only one to blame for poverty and unemployment will be the individual and not the society.


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    We have been trying to get Goldman Sachs, Mitt Romney, Bain Capital and their cohorts indicted for the eToys conspiracy – for more than a decade.

    All the federal agents (because it is Goldman Sachs & Bain Capital) are willfully blind to the skullduggery.

  2. You are correct.

    MY TYPO (sorry) –

    Here is is ( laser.haas@yahoo.com)

    *both of us should have caught it (that I miss typed my name).

    SORRY

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