Saturday, May 14, 2011

Paper

I'm a law-school student and I wrote a paper this semester on whether recklessness constitutes scienter under § 10(b) of the Exchange Act [securities fraud].  The short answer is that recklessness constitutes scienter because - while it is at best evidence of negligence - it is a strong indication of intent without the evidence to show it.  In other words, we can't prove you subjectively intended to do it; instead, we're going to look at the facts and make an objective determination that there's no other explanation other than you intended to do it (or in plain English: Bull. Shit.).
The implications for the banksters during the last credit bubble and the fraud that accompanied it shows plainly that, while there is a bounty of wrongdoing, evidence and culpable characters, the only explanation for no one being held accountable is that...goddamn it, I sound like a Zerohedge conspiracy-theorist-article-commentor...Wall Street owns Washington, at least to the point that it more resembles Tombstone, Arizona (circa late 19th century) than it does ...I can't think of a good counter-example.  In short, lawlessness is running amok on Wall Street.  Please read Matt Taibbi's most recent article! 

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