| Off With Their Heads |
5 May 2003
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Spitzer Must Bring Criminal Charges to Wall Street
It was a shame that it was news when Manhattan District Attorney Eliot Spitzer announced that his settlement of the civil case against certain Wall Street firms did not preclude criminal charges. The only legitimate complain one can make against Mr. Spitzer is that he may have settled the suit too soon. It is possible that, had he brought criminal charges before settling, the firms involved may have been even more forthcoming. All the same, he needs to put certain people in jail if they have, indeed, done what has been alleged.
The relaxed attitude that financiers have to theft-by-fountain pen has to be purged from the system if the future is to include the sort of capitalism that has made the west what it is. To be sure, capitalism is an exploitative and amoral system, but biology suggests it is the natural order of species, too. The many abuses of the legal code of capitalism are not part of that system, however.
Markets work when participants have accurate and timely information. Brokerage houses that allow their assessment of an investment's value be influenced by how much money they stand to make if the investment is made are not doing capitalism any favors. Moreover, any person who has let his opinion be driven by his wallet should not be in the business of advising others.
Trust, ultimately, is what the market relies on, whether one believes it or not. Faith in the counterparty's ability to keep its end of the bargain is what makes a deal happen, whether a stick of gum is being purchased or a major corporation is the subject of a sale. Fining a copration's owners for the actions of its agents will never solve anything -- those agents must face the music if they have committed fraud. No country club jails for them, either. A few years in Leavenworth might do the trick. Pous encourager les autres if nothing else.