Just how clean do we need markets to be? How much are we willing to do to enforce these rules? And why does there seem to be so little interest in pursuing these people?
Answers to these questions have begun to emerge in the United States. After the debacle of the financial collapse in 2008, regulators have been empowered to really pursue criminal trades. There have been a number of cases (approaching 200) many of which have emerged from the web of contacts of convicted hedge fund manager Raj Rajaratnam.
In mid 2012 these prosecutions of stock market corruption seem to be drawing to a close. With sentences of over 10 years for a number of those convicted, the message being sent to traders and market participants is clear. Yet as this article shows, when the monetary rewards are high, morality seems to be pushed to the side by human nature.
As is typically the case though, the main characters in cases such as the one above earn high salaries and bonuses and do not appear to even need the money. Motive is not always easy to establish in such trials, but there clearly is a motive and probably relates to winning and getting away with taking risks.
We at StockExchangeSecrets do not pretend to know the answers to the thorny subjects of the markets and human nature, but we can at least identify some of the issues.
http://www.stockexchangesecrets.com/stock-market-corruption.html