• 13 hours Oil Prices Rise After API Reports Major Crude Draw
  • 14 hours Citgo President And 5 VPs Arrested On Embezzlement Charges
  • 14 hours Gazprom Speaks Out Against OPEC Production Cut Extension
  • 14 hours Statoil Looks To Lighter Oil To Boost Profitability
  • 16 hours Oil Billionaire Becomes Wind Energy’s Top Influencer
  • 17 hours Transneft Warns Urals Oil Quality Reaching Critical Levels
  • 18 hours Whitefish Energy Suspends Work In Puerto Rico
  • 19 hours U.S. Authorities Arrest Two On Major Energy Corruption Scheme
  • 1 day Thanksgiving Gas Prices At 3-Year High
  • 1 day Iraq’s Giant Majnoon Oilfield Attracts Attention Of Supermajors
  • 2 days South Iraq Oil Exports Close To Record High To Offset Kirkuk Drop
  • 2 days Iraqi Forces Find Mass Graves In Oil Wells Near Kirkuk
  • 2 days Chevron Joint Venture Signs $1.7B Oil, Gas Deal In Nigeria
  • 2 days Iraq Steps In To Offset Falling Venezuela Oil Production
  • 2 days ConocoPhillips Sets Price Ceiling For New Projects
  • 4 days Shell Oil Trading Head Steps Down After 29 Years
  • 4 days Higher Oil Prices Reduce North American Oil Bankruptcies
  • 5 days Statoil To Boost Exploration Drilling Offshore Norway In 2018
  • 5 days $1.6 Billion Canadian-US Hydropower Project Approved
  • 5 days Venezuela Officially In Default
  • 5 days Iran Prepares To Export LNG To Boost Trade Relations
  • 5 days Keystone Pipeline Leaks 5,000 Barrels Into Farmland
  • 5 days Saudi Oil Minister: Markets Will Not Rebalance By March
  • 5 days Obscure Dutch Firm Wins Venezuelan Oil Block As Debt Tensions Mount
  • 5 days Rosneft Announces Completion Of World’s Longest Well
  • 6 days Ecuador Won’t Ask Exemption From OPEC Oil Production Cuts
  • 6 days Norway’s $1 Trillion Wealth Fund Proposes To Ditch Oil Stocks
  • 6 days Ecuador Seeks To Clear Schlumberger Debt By End-November
  • 6 days Santos Admits It Rejected $7.2B Takeover Bid
  • 6 days U.S. Senate Panel Votes To Open Alaskan Refuge To Drilling
  • 6 days Africa’s Richest Woman Fired From Sonangol
  • 7 days Oil And Gas M&A Deal Appetite Highest Since 2013
  • 7 days Russian Hackers Target British Energy Industry
  • 7 days Venezuela Signs $3.15B Debt Restructuring Deal With Russia
  • 7 days DOJ: Protestors Interfering With Pipeline Construction Will Be Prosecuted
  • 7 days Lower Oil Prices Benefit European Refiners
  • 7 days World’s Biggest Private Equity Firm Raises $1 Billion To Invest In Oil
  • 8 days Oil Prices Tank After API Reports Strong Build In Crude Inventories
  • 8 days Iraq Oil Revenue Not Enough For Sustainable Development
  • 8 days Sudan In Talks With Foreign Oil Firms To Boost Crude Production
Alt Text

Why Wall Street Is Bullish On Refiners

Wells Fargo has noted that…

Alt Text

Goldman’s Commodity Unit Sees Worst Q1 In A Decade

Investment bank Goldman Sachs saw…

Alt Text

5 Big Gainers In Oil & Gas This Week

Energy stocks have been among…

Wall Street Corruption: Are People Losing Faith in the Financial System

Wall Street Corruption: Are People Losing Faith in the Financial System

In order for a financial system to be able to function properly, it is absolutely essential that the general population has faith in it. After all, who is going to want to invest in the stock market or entrust their money to big financial institutions if there is not at least the perception of honesty and fairness in the financial marketplace?

For decades, the American people did have faith in Wall Street. But now that faith is being shattered by a string of recent revelations. It seems as though the rampant corruption on Wall Street is seeping up almost everywhere now. In fact, some of the things that have come out recently have been absolutely jaw-dropping.

The truth is that the corruption on Wall Street is much deeper and much more systemic than most of us ever dared to imagine.
As the general public digests these recent scandals, it is going to result in a tremendous loss of faith in the U.S. financial system.

Once faith in a financial system is lost, it can take years or even decades to get back.  So how is the U.S. financial system supposed to work properly when large numbers of people simply do not believe in it anymore?
Just consider some of the recent revelations of Wall Street corruption that have come out recently....

*Bloomberg is reporting that a massive network of big banks and financial institutions have been involved in blatant bid-rigging fraud that cost taxpayers across the U.S. billions of dollars. The U.S. Justice Department is charging that financial advisers to municipalities colluded with Bank of America, Citigroup, JPMorgan Chase, Lehman Brothers, Wachovia and 11 other banks in a conspiracy to rig bids on municipal financial instruments.

Apparently what was going on was that it was decided in advance who would win the auctions of guaranteed investment contracts, which public entities purchase with the proceeds from municipal bond sales, and then other intentionally losing bids were submitted in order to make the process look competitive.

The U.S. Justice Department claims that this fraud has been industry-wide and has been going on for years.  In fact, at least four financial professionals have already pleaded guilty in this case.

*An industry insider has come forward with "smoking gun" evidence that some of the biggest banks have been openly and blatantly manipulating the price of gold and silver.

For a time it looked like the federal government was just going to ignore all of this fraud, but after substantial public uproar some action is indeed being taken.  In fact, it has been reported that federal agents have launched parallel criminal and civil probes of JPMorgan Chase and its trading activity in the precious metals markets.

*New York attorney general Andrew Cuomo is investigating whether eight major Wall Street banks purposely misled the big credit ratings agencies so that they would give their mortgage-backed securities AAA ratings that they did not deserve.
*There has been a ton of legal action surrounding mortgage-backed securities lately.

 For example, the Justice Department and the Securities and Exchange Commission are now investigating Morgan Stanley as part of a probe into whether Wall Street firms deliberately misled investors regarding the sale of mortgage-related securities.

*Goldman Sachs is getting most of the press about fraud in the mortgage-backed securities market these days.  Of course Goldman is strenuously denying that it "bet against its clients" when it changed its position in the housing market in 2007. But we all know the truth at this point.

The truth is that Goldman Sachs clearly bet against its clients and was involved in a whole lot of things that were even worse than that. Many did not think the U.S.
government would dare go after Goldman, but that is what we are starting to see. 
U.S. federal prosecutors have opened a criminal investigation into whether Goldman Sachs or its employees committed securities fraud in connection with its trading of mortgage-backed securities, and it will be very interesting to see if anything comes of that investigation.

*But not everyone is being held accountable for their actions. The guy who helped bring down AIG is going to get off scott-free and is going to be able to keep the millions in profits that he made in the process.

*Entire U.S. cities have been victims of this rampant Wall Street fraud.  In fact, it is now being alleged that the biggest banks on Wall Street are ripping off some of the largest American cities with the same kind of predatory deals that brought down the financial system in Greece.

*The really sad thing is that fraud is very, very lucrative. Executives at many of the big banks that received large amounts of money during the Wall Street bailouts are being lavished with record bonuses as millions of other average Americans continue to suffer economically. Even the CEOs of bailed-out regional banks are getting big raises. It must be really nice to be them.

So does all of this make you more likely or less likely to invest in the stock market?
Do you think that the American people can see all of this and still believe that the financial system is "fair" and "honest"?

The truth is that Wall Street is full of rip-off artists and fraudsters who don't even try to hide their greed anymore.

It is as if a thousand junior Gordon Gekkos have been unleashed and they are all trying to be masters of the universe at any cost.
But what they are doing is ripping the heart out of the U.S. financial system.

If people lose faith in the system the system will ultimately fail.
A financial system that allows open fraud and manipulation is operating on borrowed time.

So will the rampant corruption on Wall Street now be cleaned up?
Only time will tell.

By. Michael Snyder

Oilprice.com is the no.1 source for oil prices and crude oil information




Back to homepage


Leave a comment
  • Anonymous on May 23 2010 said:
    for 'Wall Street' the main point will be for not one single criminal to get away with any of what has been going on, so the situation leads into a real test of USA lawmakers, who today appear to have demonstrated that they are willing to fail in their duty to USA citizens by working to protect the financial industry criminals.
  • Anonymous on May 25 2010 said:
    I recall articles in 2008 stating that any solution to the financial crisis must also include restoration of integrity. It has been two years and yet the gaming and scheming continue.The public has given up hope. We have nothing but contempt for the political establishment, and no hope for a finanical system so thoroughly rigged to serve the needs of everyone who can rig it.
  • Anonymous on May 26 2010 said:
    im still amazed at how many investors are ignorant to this. they call people like me conspircay theorists. have you ever watch level 2 quotes? you can watch them blatantly manipulate the hell out of the small caps. they but a massive size on a redicoulusly low ask so that anyone that wants to sell must sell below their price. and coincidently there is a huge bid just under that price waiting to scoop it up. fairly obvious when the huge bid/ask is in the hundred thousands while everyone else is dealing in lots of 1 or 2 hundred.

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News