|  | | 2008 News and Press Releases | | |
HEADLINE NEWS:
What Goes Before A Fall? On Wall Street, Reassurance
Andrew Ross Sorkin
New York Times. September 30, 2008
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EXCERPT: “Jim, we have a great future as an independent company,” Robert K. Steel, Wachovia’s chief executive, told James Cramer on CNBC’s “Mad Money.” “We’re also focused on very exciting prospects when we get things right going forward. I didn’t have time today to talk about the good things going on at Wachovia.” That interview wasn’t last month or last year — it took place, amazingly, two weeks ago. Wachovia’s shares closed at $10.71 that day. On Monday, Citigroup bought the company for $1 a share. What was Mr. Steel thinking? Did he think he could “spin” his way to survival? It is a conundrum that C.E.O.’s of troubled companies seem always to face. In an effort to bolster public confidence in their businesses, they give interviews and try to put on a happy face — right before their companies go off a cliff. … It is hard to imagine that taxpayers would spend $700 billion (or any amount) to bail out Wall Street and the economy without some big-name executive going to jail. For better or worse, it is the way our society works. Michael Milken can tell you all about it. More likely than not, when we start seeing pictures of C.E.O. perp walks, the crime won’t be theft or some other kind of financial chicanery, it will be some kind of fraud — probably lying to the investing public. “If there are ways people in this room go to jail, it’s probably through crimes of upholstery — the cover-up will kill you,” Joseph A. Grundfest, a professor of law at Stanford University who is a former commissioner of the Securities and Exchange Commission, said at a class for directors of the nation’s Fortune 500 that I attended in 2002 in the aftermath of Enron’s collapse. It’s a great line that I’ve never forgotten. |
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