What A Tangled Web They Weave -- Over $1 Billion in Losses
If Shakespeare were alive today, he might be seeking out an interview with Judge Jack Weinstein. Or perhaps invite him up to Stratford for a weekend of discussion on the human condition and its intersection with the sub-prime crisis.
Last week, the Judge sentenced Eric Butler, a securities dealer who formerly worked for Credit Suisse. Think of all the good work he could have done in five years on Wall Street.
Instead, he will be in prison and he will pay $5 million dollars in fines. He will also be supervised for three years after his release from prison. He told the court tearfully last week that he regrets all of this.
Mr. Butler was fairly brazen apparently in his push to get investors into very high-risk sub-primes that also happened to carry high-commissions. These investors lost over one billion dollars.
He was convicted of things that Shakespeare would not have known about and some things he would like fakery and fraud. In fact, allegations of securities fraud, conspiracy to commit securities fraud and conspiracy to commit wire fraud were the rub for Mr. Butler.
The Judge's Statement of Reasons at the sentencing on some of these charges included deeply cutting prose. Pointing to the "the pernicious and pervasive culture of corruption" on Wall Street, the Judge went out of his way to express his concerns saying that "[t]he most compelling aspect of this case may be its illumination of the need to reconsider how compensation is calculated and investment products are marketed by the financial industry." He urged reform.
Lots of people are condemning this culture. It has hurt many people in America.
If Shakespeare failed to rip this story from the headlines, perhaps Charles Dickens would. The tale aligns well with so many Dickens characters as life imitates art. Or more likely, these great artists understood what is in the human character. One such Dickens character Mr. Merdle, swindles all the swooning swells of the time in a Ponzi-like scheme almost exactly along the lines of Mr. Madoff. The character of Mr. Butler is apparently not far off the mark.
And so into the annals of American law go the likes of Eric Butler. He is the new Merdle. He hopefully has learned that crime does not pay as his family has lost him for a period of years to another place, maybe not as bad as the Marshalsea prison, but still, prison.
In his Sentencing Statement of Reasons the Judge passed responsibility around the table like a plate of cookies in a Rockwell painting gone wrong. "The blame for this condition is shared not only by individual defendants like Butler, but also by the institutions that employ them, those who carelessly invest, and those who fail to regulate. Supervision is seriously negligent; greed and short-term gain are so enormous that fraud and arrogant disregard of others' rights and of ethics almost encourage criminal activities such as defendant's."
So, in short, the Judge seemed to be saying that we all need to look at this culture, because it is not any one defendant's doing. It is a culture Americans have allowed, it is our Wall Street and it is our responsibility to make it right. Both Shakespeare and Dickens would probably approve of that message.
Related Web Resources
For a complete review of the Sentencing Statement of Reasons, click here.
