Why haven’t more investment firms sued Wall Street banks for selling them trashy bonds? Could it be, asks Philip McBride Johnson, because they are scared their own ineptitude will come to light?
Largely lost in the cascade of outrage over Wall Street’s promotion of transactions that were likely (or even designed) to fail is the fact that most investors in those products were pension plans, retirement accounts, banks, college endowment funds and other institutions that have been assumed by the law to be able to take care of themselves.
What happened to the presumption that these large, wealthy aggregations of capital would be managed by the best and brightest financial minds? Or that the board of trustees would examine each transaction with the sceptical eye of a vigilant fiduciary? What were they doing as the odour grew stronger with each new proposal put to them?
Without any hard...