In Finance, Crime Does Pay

In addition to the HFT cheaters so aptly lampooned by Cassandra, look at SAC Capital, supposedly the most successful of hedge funds, now under criminal indictment for insider trading with another employee being arrested just today. Then there is J.P. Morgan, which, according to the Daily Beast, has paid over $7 billion in fines in just the last two years “without admitting or denying guilt” for a wide variety of offenses.

How much of the success of these players is due to cheating and criminal behavior? Hard to say at this point, but it seems pretty clear that JPM’s fines have been a slap on the wrist compared to the harm done to the victims, so one tends to suspect the answer is “Most of it.” All of which leads one to believe that the fraud and cheating is endemic and we are looking at the tip of an iceberg of criminal and unethical behavior. At the end of Wall Street, just turn left onto Pennsylvania Avenue which is where the moral compass truly turns in circles.

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