‘Nobody was minding the store’: Who is responsible for detecting fraud on Wall Street?
Eliot Spitzer
In this “Viewpoint” Web exclusive, Guy Lawson, author of “Octopus: Sam Israel, the Secret Market and Wall Street’s Wildest Con,” reflects on his early experience dealing with Libor as a junior attorney on Wall Street.
“It occurred to me that if they were counting on kids like me to watch out for fraud and cheating, then they were in a lot of trouble because nobody was minding the store,” Lawson says. “It wasn’t by accident — that occurred to me as well, that you’d have kids and underpaid regulators watching this stuff because it effectively allows powerful people to do what they want, which is what Libor turns out to be — it’s just a bunch of people in a room deciding how to dice up the money.”
As for whether it might be possible to achieve Wall Street reform, Lawson observes: “I don’t know what kind of problem it’s going to take. The global financial crisis didn’t seem to sober anyone up.”