The Perfect Storm?
Chapter 3: The financial crisis: An alternative interpretation - Part II
The purpose of this third chapter is to continue to illustrate the connection between the financial crisis and white collar crime. The chapter begins by highlighting the link between the financial crisis and Ponzi fraud schemes, with particular attention given to the fraud schemes implemented by Bernard Madoff and Allen Stanford. This part also provides a commentary on how the financial crisis contributed towards an increase in the number of Ponzi related schemes. The chapter then moves on to consider the relationship between the al-Qaeda terrorist attacks in September 2001 and the financial crisis. This segment of the chapter concentrates on how the instigation of the 'War on Terror' and 'Financial War on Terrorism' by President George Bush indirectly contributed towards an increase in white collar crime before and during the most recent financial crisis. This argument is illustrated by the adverse influence this decision was to have on the ability of law enforcement agencies, in particular the FBI, to be able to tackle mortgage fraud. It is important to note that mortgage fraud has already been identified in Chapter 2 as one of the variables that contributed towards the financial crisis. The chapter then moves on to critically consider the significant increase in occurrences of market misconduct. This part of the chapter is heavily influenced by the significant increase in the enforcement actions pursued by the SEC against a wide range of financial institutions that contributed towards the financial crisis.
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