| Sažetak: | <p>Since the 1970s, evidence has mounted of wrongdoing in U.S. financial markets.
This study, which consists of a series of cases of financial wrongdoing, argues that
such wrongdoing is systemic – the cases discussed are merely the tip of the iceberg –
and reflects a normative failure.</p>
<p>The chapters focus on particular processes which occurred within or particular
phenomena which characterised the relevant period. From the mid-1970s, insider
trading cases show the authorities shifting emphasis from the spirit to the letter of the
law. From the late 1970s, the process of banking deregulation shows large banks
aggressively exploiting loopholes and accomplishing their mission to tear down the
law. From the 1980s, in the face of escalating crises, collapses, bankruptcies, and
scandals, regulators pushed for further deregulation and instituted a ‘too big to fail’
policy. From the 1990s, company cases show companies repeatedly engaging in
wrongdoing and prioritising growth and profitability over control and compliance. In
the 2000s alone, there was a long list of scandals that involved large-scale and
widespread wrongdoing and that implicated numerous leading and prestigious firms.
Systemic regulatory failure is suggested. Central are the Securities and Exchange
Commission’s longstanding policies of privately negotiating settlements, imposing
relatively modest penalties, and allowing wrongdoers to avoid admitting any
culpability. Moreover, there are indications that the SEC has paid undue deference to
industry leaders, punished whistleblowers, and destroyed evidence. There are also
indications that SEC officials see the Commission as a step towards a job with a highpaying private firm. One consequence of a rapidly spinning revolving door is that the
regulators and the regulated begin to share worldviews.</p>
<p>Essentially, this study argues that the asymmetric and imperfect information
that characterises financial relationships enables wrongdoing. The integrity of the
system depends on the integrity of market officials and/or participants. But, the
system has de-stigmatised, legitimised, and encouraged self-serving norms, oblivious
to the social harm they create. The implication is that financial wrongdoing can only
be remedied by normative reorientation – especially by legislators, regulators, and
judges. This will entail cultivating and protecting a public sphere which is governed
by norms and ideals distinct from those governing the private sphere.</p>
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