Tag: Wall Street

The Big Short in the Federal CourtsI recently watched the unsettling movie, The Big Short, which vividly depicts the blatant fraud and corruption on Wall Street that led to the global economic collapse and the Great Recession. Like many viewers, I felt deeply troubled by the colossal failure of the American government to protect ordinary Americans from the predatory behavior and criminality of Wall Street bankers and brokers. However, as an attorney who writes about the law and represents workers who are victims of abuse and discrimination, my thoughts soon turned to another pressing issue that is currently being ignored by both the American government and the press: the systemic failure of the federal court system to protect ordinary American workers from employment discrimination.

For years, there has been undisputed and powerful evidence that the federal court system, much like America’s financial system, operates to benefit powerful moneyed interests at the expense of ordinary workers. A major indicator of this troubling trend is the federal courts' routine dismissal of employment discrimination lawsuits at a far higher rate than other types of business lawsuits.

In my book, Betrayed: The Legalization of Age Discrimination in the Workplace, I meticulously document how the U.S. Congress and the Supreme Court have made it exceedingly difficult for workers to prevail in age discrimination lawsuits. The Age Discrimination in Employment Act of 1967 (ADEA) is weak and riddled with loopholes compared to Title VII of the Civil Rights Act of 1964, which prohibits discrimination based on race, sex, religion, national origin, and color. In 2009, the U.S. Supreme Court issued a completely unnecessary ruling requiring age discrimination victims to prove a far higher level of causation than is required under Title VII. A proposed federal law that would address the Court’s detrimental ruling has languished in a Congressional committee for six years. Consequently, Congress and the Court have effectively legalized age discrimination in employment—discrimination that would be illegal if the victim wore a hijab or hailed from Zimbabwe or Yemen.

Last spring, I attempted to contact the Judicial Conference of the United States, a 16-member body (with no citizen representative) that ostensibly runs the federal court system. I wanted to highlight that discriminating against employment discrimination victims is tantamount to actual discrimination. I found the Conference’s website, but it contained no contact information. A spokesperson for the Administrative Office of the U.S. Courts (AOC) suggested that I send my correspondence to the federal circuit court in my jurisdiction, which has a seat on the Conference body. In exasperation, I submitted an “open letter” via a web form on the AOC website, requesting legal reform. I have concluded, rightly or wrongly, that the “leadership” of our federal court system is unapproachable.

In The Big Short, some savvy observers figured out that the housing market was about to collapse and found a way to profit from it. It seems likely to me that one day the “bubble” surrounding the federal court system will burst. Just as there was almost universal faith in the housing market, Americans have historically shown a high degree of trust in the courts. That trust erodes every time the court permits unscrupulous employers to use the legal system to deny workers respect, dignity, and fundamental fairness.

The lack of accountability and transparency within the federal court system, combined with its apparent bias towards powerful interests, poses a significant threat to the principles of justice and equality. It is imperative that we address these systemic issues and advocate for reforms that ensure all individuals, regardless of age or other protected characteristics, receive fair treatment under the law. Utilizing IT manager software can streamline the administration and oversight of such reforms, ensuring that changes are implemented efficiently and effectively. Only then can we restore faith in our judicial system and uphold the rights of ordinary American workers.Trust is lost when courts permit employers to use the legal system as a weapon against American workers.

Meanwhile,  President Barack Obama  encouraged age discrimination in hiring when he signed an executive order in 2010 that permits federal agencies to bypass older workers and hire “recent” graduates and  U.S. Labor Secretary Thomas Perez earlier this year endorsed a private initiative by America’s largest corporations that openly discriminates against older workers. The federal government is the nation’s largest employer.

All of this  is happening in plain sight but it has gone largely unreported by the tattered shreds of what remains of America’s once vigorous media.  (I may sound a bit cynical on this score because the 18th richest man in the world, Sheldon Adelson,  a casino operator and major Republican donor who owns a free newspaper in Israel, recently secretly purchased  Nevada’s largest newspaper and immediately began testing the limits of journalism ethics.)

Like the housing market bubble, the bubble in the federal court system is attributable in large part to inattention, neglect and failure of accountability. Continue reading “The Big Short in the Federal Courts”

Yes, Virginia, There is a Thing Called Justice

justice-scale-761665_1Perhaps the most devastating aspect of the financial crisis on Wall Street is the uneasy feeling among people  that our system of justice is fundamentally unequal.

Not a single high-level executive has been prosecuted by the U.S. Department of Justice or the U.S. Securities Exchange Commission for fraud that precipitated a world-wide financial collapse, from which many are still suffering. At the heart of the collapse was the bundling and sale  of bad mortgages into “securities” that were backed by nothing more substantial than a wish and a prayer.

The government’s “failure to prosecute” the  financial executives who set this fraud in motion and profited obscenely from it gives rise to a profoundly depressing notion that American democracy is just a front for predatory capitalists who ignore the law while reaping 99 percent of the nation’s wealth. Once that belief is credible, it is easier to think that other institutions, including our judicial system, look the other way.

Jed S. Rakoff, a federal judge for the Southern District of New York, has written an important article in The New York Review that offers real insight into and debunks the reasons proffered by the government for its failure to prosecute.  But most importantly, Judge Rakoff took off his black robe  for a moment to challenge the very idea that it is ever acceptable for our government to be willfully blind to corporate executives who engage in financial fraud.

U.S. Attorney General Eric Holder told Congress that it is difficult to prosecute when “we are hit with indications that if you do prosecute—if you do bring a criminal charge—it will have a negative impact on the national economy, perhaps even the world economy.”

Judge Rakoff’s response: “To a federal judge, who takes an oath to apply the law equally to rich and to poor, this excuse—sometimes labeled the “too big to jail” excuse—is disturbing, frankly, in what it says about the department’s apparent disregard for equality under the law.”

Judge Rakoff notes the Financial Crisis Inquiry Commission, in its final report, used variants of the word “fraud” 157 times to describe what led to the crisis, concluding that there was a “systemic breakdown,” not just in accountability, but also in ethical behavior. The commission found the number of reports of suspected mortgage fraud rose twenty-fold between 1996 and 2005 and then doubled again in the next four years.

The judge notes that the statute of limitations is expiring on fraud related to the financial collapse.

He said the U.S. Department of Justice’s position, until at least recently, was that “going after  suspect institutions poses too great a risk to the nation’s economic recovery. So you don’t go after the companies, at least not criminally, because they are too big to jail; and you don’t go after the individuals, because that would involve the kind of years-long investigations that you no longer have the experience or the resources to pursue.”

 

Corporate Psychopaths on Wall Street

Note: The theory that a significant percent of abusive managers are actual psychopaths is not new.  Robert D. Hare, Ph.D., and Paul Babiak, Ph.D., published the book, Snakes in Suits: When Psychopaths Go to Work  in 2006. Jon Ronson, author of the 2011 book, The Psychopath Test,  interviewed former American chief executive officer “Chainsaw” Al Dunlap,  who was notorious  for closing factories and laying off workers  in the 1990s. Ronson concluded Dunlap possessed many but not all of the traits of a psychopath. For example, Dunlap had no record of juvenile delinquency and was in a long standing marriage. PGB

 Precipitated Financial Collapse?

A former British academic has advanced a theory that “corporate psychopaths” at the helm of financial institutions in the United States are largely to blame for the global financial crisis.

“They are happy to walk away from the economic disaster that they have managed to bring about, with huge payoffs and with new roles advising governments how to prevent such economic disasters. Many of these people display several of the characteristics of psychopaths, and some of them are undoubtedly true psychopaths,” writes Clive R. Boddy, in a recent book published by Macmillan, Corporate Psychopaths: Organizational Destroyers.

He says psychopaths are the one percent of “people who, perhaps due to physical factors to do with abnormal brain connectivity and chemistry” lack a “conscience, have few emotions and display an inability to have any feelings, sympathy or empathy for other people.”  These people, Boddy adds, are “extraordinarily cold, much more calculating and ruthless towards others than most people are and therefore a menace to the companies they work for and to society.”

Psychopaths make it to the top of successful corporations, Boddy says, because they take advantage of the “relative chaotic nature of the modern corporation,” including “rapid change, constant renewal” and high turnover of “key personnel.”  They exhibit a combination of “charm” and “charisma,” which makes “their behaviour invisible” and “makes them appear normal and even to be ideal leaders.”

Boddy argues in a recent issue of the Journal of Business Ethics that psychopaths working in senior positions in corporations and in financial corporations had a major part in causing the global financial crisis.

He says corporate psychopaths  “largely caused the crisis” because their “single-minded pursuit of their own self-enrichment and self- aggrandizement to the exclusion of all other considerations has led to an abandonment of the old-fashioned concept of noblesse oblige, equality, fairness, or of any real notion of corporate social responsibility.”

Boddy told Bloomberg View columnist William D. Cohan that senior managers should be screened to insure they are not psychopaths and actually care about others.

In his book, Boddy says that psychopaths destroy the morale and emotional well-being of fellow workers  “by humiliating them, lying about them, abusing them, using organisational rules to control them, not giving them adequate training, blaming them for mistakes made by the psychopath, bullying them and coercing them into unwanted sexual activities … .”

Boddy is a former professor of marketing at the Nottingham Business School at Nottingham Trent University in the United Kingdom and a former co-founder/director of a pan-regional, Asia-Pacific marketing research company that was sold to a marketing conglomerate in 2002 for a reported $80 million.

The Occupy Wall Street Movement

It is ironic that the first flicker of optimism in recent months should stem from a rag-tag  protest group called Occupy Wall Street in New York City.

For years, American workers have seen factories shuttered and jobs exported overseas, experienced high and chronic unemployment, have been overworked and underpaid amid blatant and reprehensible corporate greed.

In the small world of workplace anti-bully advocates, state-by-state efforts to pass what can charitably be called anemic legislation to protect workers from this insidious form of abuse has failed to produce a  single victory in eight years. This despite the fact that most industrialized countries recognized the problem years ago and took steps to combat it.

Meanwhile, Congress appears to be in a state of paralysis, held hostage by a small group of right-wing legislators who prefer cuts in programs vital to the well-being of vulnerable children and the elderly to the repeal of tax cuts that already have transferred much of America’s wealth to the wealthiest one percent of our population.

About three weeks ago, a small group of protesters set up an encampment in New York’s Financial District to decry home foreclosures, high unemployment and the 2008 bailouts, as well as excessive force and unfair treatment of minorities, including Muslims. Their message has resonated.

On Wednesday, some of New York City’s most powerful unions were set to march from City Hall to the protest movement’s base at a park in lower Manhattan. They were to be joined by students at major public universities in New York City, where tuition is rising.

Meanwhile, similar “occupation” movements are springing up in cities around the country. On Tuesday, the Greater Boston Labor Council, representing 154 unions with 90,000 workers, supported the Occupy Boston encampment for shining “a spotlight on the imbalance of power in our nation and the role that Wall Street has played in devastating our economy.”

Nothing tangible has changed for American workers but at the same time it feels like something intangible is changing.

It is no longer just a few small voices in the wilderness who are demanding positive change on behalf of most Americans.