Wall Street lied. That was the headline after New York’s Attorney General Elliot Spitzer, speaking from the basement of the Securities and Exchange Commission, announced a settlement deal with 10 of the oldest and largest banks in America.
Under the deal, the banks will pay $1.4 billion in fines for committing fraud. The list of accusations is long, filled with sorry, sordid tales of Wall Street executives, in bed with their corporate clients, hyping and selling stocks even as they privately called those same stocks dogs, pigs, or worse.
Spitzer’s deal is intended to clean up Wall Street, but the fines are paltry and worse, the banks have admitted no fault. Investors who lost their retirement and college funds are not getting any of their money back, and it’s still not clear if the new rules will really change the game.
Guests:
Hedrick Smith, Pulitzer Prize-winning reporter, Producer, “The Wall Street Fix”, for PBS Frontline
Chuck Hill, Director of Research, Thomson First Call and a longtime stock analyst