Chapter 1: Introduction
The global financial crisis has revealed massive financial frauds and misconduct that have long been a part of our markets but have been submerged by the euphoria that has dominated these markets … white collar and corporate crimes have long been part of markets and are among the most difficult crimes for the legal system to deal with, let alone control. This is especially so where these crimes are of enormous proportions or involve some of the most powerful individuals or corporations in a society. Their seeming invulnerability to regulation is enhanced in boom times and this is further buttressed by powerful political forces supporting corporate risk taking. These political forces have served to muzzle or curtail the activities of enforcement agencies either directly, through the lack of adequate resources, or indirectly, by promoting ideologies which legitimise the minimal role of government in markets and a preference for industry self-regulation. While the vulnerabilities that created the potential for crisis were years in the making, it was the collapse of the housing bubble - fuelled by low interest rates, easy and available credit, scant regulation, and toxic mortgages - that was the spark that ignited a string of events, which led to a full-blown crisis in the fall of 2008. Trillions of dollars in risky mortgages had become embedded throughout the financial system, as mortgage-related securities were packaged, repackaged, and sold to investors around the world.