Wall Street Scam

Saw The Wall Street Fix on PBS last night about the WorldCom debacle. Based on that, Jack Grubman was the slime ball behind it all, Bernard Ebbers was just the figurehead, and even Alan Greenspan doesn’t come out looking so good (he let Travelers Insurance and Citibank bend the rules to do an illegal merger which made the financing of Worldcom possible). It ended with tiny penalties to the people involved. Jack Grubman was fined less than one year’s salary and was fired from his job, but given a $30 million severance package (which was 2x his penalty). “Steal $5 and you’re a thief, steal $5 million and your a financier”.

Eliot Spitzer let these guys get away with serious crimes, but it’s hard to fault him. He did more than anyone else did, but was unlikely to have a significant victory in a prolonged trial against well-financed lawyers. And the Bush Administration doesn’t have a great track record of enforcing laws against wealthy people and corporations. It’ll be interesting to see what happens to the Enron and Worldcom execs on trial by the SEC.

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