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.