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Wednesday, January 02, 2008

The Silver Lining in the Subprime Mess

It’s beginning to look like 2000 all over again. The Wall Street Journal reported that the SEC alone has launched dozens of investigations tied to the subprime crisis. The investigations are eerily familiar to those that were held after that tech bubble burst in 2000 and ultimately led to the $1.4 billion global settlement.

But there is a fundamental difference this time around: some of the CEOs who oversaw the subprime mess at their respective firms – namely Chuck Prince at Citigroup, Stan O’Neal at Merrill Lynch – have already been fired. Bear Stearns reportedly is looking to replace Jimmy Cayne.

Flashback to the conflicted research probes where no CEOs – not even Sandy Weill who created the most conflicted financial conglomerate ever – lost their jobs because of Wall Street’s rampant institutional dishonesty.

Although wrongdoing is as pervasive as ever on Wall Street, it’s a progressive step forward when CEOs – and not hapless middle managers – are actually held accountable.


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