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The End of Ethics and A Way Back: How To Fix A Fundamentally Broken Global Financial System

Book Description

Bestselling author and professor Ted Malloch calls for real financial reform to restore confidence and fairness to a broken system

From Ponzi schemes to the credit crisis to the real estate bubble, the financial industry seems to have lost its way on the road to riches. As private greed continues to undermine the public good, one might wonder what ever happened to business ethics. And how can we reform the global financial system to benefit everyone, rather than just the very lucky few? In The End of Ethics and the Way Back, the bestselling author of Doing Virtuous Business teams up with attorney and Yale University Postdoctoral Fellow, Jordan Mamorsky to examine the most recent failures of business virtue, prudence, and governance—from Bernie Madoff to Jon Corzine and MF Global—before offering a set of structural and holistic solutions for our current ethical crisis in global finance.

  • Features compelling case studies that reveal the saturation of economic vice in global finance

  • Suggests structural reforms to the global financial system that would increase confidence among consumers and encourage ethical behavior among finance professionals

  • Written by Ted Malloch, author of the bestseller Doing Virtuous Business with attorney Jordan Mamorsky

  • Ideal for financial regulators, business students and academics, and professionals in the finance industry

Table of Contents

  1. Cover
  2. Contents
  3. Title
  4. Copyright
  5. Dedication
  6. Foreword
  7. Acknowledgments
  8. Introduction
  9. Prologue
  10. Part One: Economic Vice
    1. Chapter 1: The Selfish Betrayal of the Global Investor: Libor and Its Consequences
      1. The Calculation of Libor
      2. The Rise and Fall of the World’s Financial Benchmark
      3. Knowingly Asleep at the Wheel
      4. A Troubling New Normal
      5. Notes
    2. Chapter 2: Jon Corzine’s Fallen Empire of Risk: MF Global
      1. History of MF Global
      2. Jon Corzine’s Midwestern Roots
      3. The Rise of “Fuzzy”
      4. The Establishment of MF Global
      5. Rogue Trader Scandal
      6. From Gubernatorial Disgrace to MF Global CEO
      7. MF Global under Corzine
      8. Risk Governance Failures
      9. Notes
    3. Chapter 3: The Continued Rating Agencies Game: Will Rating Agencies Be Reined in for the Sake of Global Market Stability?
      1. History of Rating Agencies
      2. Mortgages and the Ratings Boondoggle
      3. Notes
    4. Chapter 4: Belligerent Leadership and the Demise of Lehman Brothers
      1. History of Lehman
      2. Brewing Anger
      3. Uncaging the “Animal”
      4. Culture of Anger
      5. Increasing Risk and Authority
      6. Walsh’s Rise
      7. A Gorilla Bursting the Bubble
      8. Extreme Leverage
      9. The Deception of Repo 105
      10. Fuld’s Marginalization of Risk Management
      11. Fuld’s Last Chance to Save Lehman
      12. Notes
    5. Chapter 5: How Out-of-Control Pride Brought Down Bear Stearns
      1. History of Bear
      2. A Different PSD
      3. Greenberg’s Vision of Corporate Thrift at Bear Stearns
      4. Bridge Bum Turned Bear Salesman and CEO
      5. A Casino Culture
      6. BSAM: Bear Stearns’ Kryptonite
      7. “Never a Losing Month”
      8. The End of Bear Stearns: The Importance of Golf and Bridge during a Liquidity Crisis
      9. JP Morgan and the Takeover of Bear
      10. Notes
    6. Chapter 6: Tyco: Exceptional Greed and the Destruction of a Billion-Dollar Company
      1. Tyco History
      2. The Makings of a “Bad” CEO
      3. Seeds of Greed
      4. Kozlowski’s Culture of Fear at Grinnel
      5. Looting the Company
      6. Kozlowski’s Accomplices
      7. A Convicted “Piggy”
      8. Notes
    7. Chapter 7: Insatiable Lust and Two of the Most Destructive Ponzi Schemes in American History
      1. The Ponzi Scheme and Society
      2. Bernie Madoff and the Seeds of Lustful Temptations
      3. Madoff’s Culture of Sexual, Criminal, and Moral Deviance
      4. Tom Petters, the High School Dropout
      5. Birth of the Ponzi Scheme, Petters Company Inc.
      6. Succumbing to Uncontrollable Lust
      7. Madoff’s Cast of Characters
      8. Petters’ Cast of Characters
      9. Will We Witness Another Madoff?
      10. Notes
    8. Chapter 8: HealthSouth and WorldCom: How a Gluttonous Appetite for Expansion Resulted in Accounting Fraud and Failed Corporations
      1. HealthSouth
      2. Bernie Ebbers and WorldCom
      3. Blunting Future Accounting Fraud
      4. Notes
  11. Part Two: Recommendations
    1. Chapter 9: Why Financial Regulation Has Failed, and What to Do about It
      1. The Failed Promises of Dodd–Frank
      2. The New Rules of the Game that Reinforce Vice
      3. A Dummies’ Guide to Save the SEC
      4. The Regulatory Reforms Necessary to Reverse the End of Ethics
      5. Reforms Needed for the Commodities Market
      6. The Need for Heightened and Streamlined Fiduciary Rules
      7. Notes
    2. Chapter 10: The Case for Reintroducing Governance and Morality
      1. The Important Demand for Corporate Governance
      2. The Importance of Corporate Responsibility
      3. The Importance of Reputation and Avoiding Long-Term Litigation Costs
      4. Bonuses Redux: Corporate Welfare Reform and Cutting Golden Parachutes
      5. The Need to Morally Redefine Ourselves on the Macro Level
      6. Rebuilding Our Character
      7. How to Remedy the Evils in Modern-Day Consumerism
      8. Virtue and the Moral Life
      9. The Consequences of Modern Selfishness
      10. Modern Theories and Institutions
      11. Democratic Morality and Our Current Crisis
      12. Notes
    3. Chapter 11: The Way Back
  12. Appendix
  13. About the Authors
  14. Index