“When morality comes up against profit, it is seldom that profit loses.” – Shirley Chisholm
Who We Are and Aren’t
We don’t hate Wall Street. We don’t want to discourage investing. We do not have a fetish for regulation.
We are a small group of people who currently work, or have worked, in the financial services sector. We are troubled by the prevalence of investment-related fraud and market manipualtion. We are concerned about the corresponding lack of protection for retail investors — just at a time when they need it most.
There are few deterrents, and many incentives, for financial firms and public companies to engage in criminal activity. If they are caught, they are allowed to pay a fine without an admission of guilt. In this paradigm, only the retail investor is punished.
We use aliases on this site. Although we believe our mission is in sync with those of our employers, we are not wholly sure they would see it that way. We also believe that our use of aliases will give us a chance to channel our better angels and let us strive for idealism in our non-ideal world.
Aggregation as a Mission
WSW is an aggregator. We provide our content along with existing reports, press releases and articles (with attributions and links) on topics that highlight the risks to the retail investor. We aim to be a one-stop-shopping expedition for the malfeasance and skulduggery on Wall Street.
Websites aggregate for many reasons. Most use an aggregation model to minimize content costs and maximize advertising revenues. For the WSW, however, aggregation is our raison d’etre. It is not a means; It is in lock step with our goal.
Journalists and regulatory agencies are out there, releasing important material about crimes and misdemeanors in the investment world. But as a small fraction of media content, the magnitude of the message is often lost. Almost every single day, there is news that exposes criminal and unethical behavior in the markets. Only by aggregating this information can the scope of the problem be fully understood.
Why Now
A survey conducted by Labaton Sucharow revealed that 24% of financial services professionals felt that in order to succeed they may need to engage in illegal or unethical conduct. Roughly 26% admitted to having firsthand knowledge of wrongdoing. And another 16% would knowingly commit a crime such as insider trading if they thought they could get away with it.
The results of the survey are not surprising. The investment world has carefully nurtured a less than pristine culture. However, the risks of investment wrongdoing are much higher today. The brunt of today’s investment moral hazard is being borne by a growing, and mostly unsuspecting, public.
More Knife-Wielding Retail Investors Are Being Sent into Wall Street’s Gun Fight
Monetary easing across the globe has pushed interest rates of risk-free assets to historic lows. This has driven retirees into riskier assets in order to pay their monthly bills. Between 1977 and 2007, the percentage of employees who could count on retiring with a defined annuity benefit plan has dropped from 65.8% to just 22.5%. Over the same period, participation in employee contribution retirement plans such as 401(K)s has risen from 34.2% to 77.5%. Retirees and employees are more dependant on the stock market than ever before.
Can this really end well?