The Derivative Project

Book Review: Larry Doyle’s In Bed with Wall Street: A Must Read, a “Book that Matters”

Book Review: Larry Doyle’s In Bed with Wall Street: A Must Read, a “Book that Matters”

While many have grown so tired with the hashing and re-hashing of why our systems failed us in the 2008 and 2009 financial crisis, Larry Doyle’s new book, released today, In Bed with Wall Street – The conspiracy crippling our global economy– should be read, shared and discussed, not just by the regulators or Wall Street, but more importantly, the average American.
In this review, we seek to highlight that this is the first and only book, post 2008 financial crisis, to focus on one of the most compelling issues Congress must wrestle with:  FINRA, the self-regulation of Wall Street and the SEC’s oversight of FINRA. Yet, this issue and its implications are an unknown to the average American.  Larry’s In Bed with Wall Street is the first step to change that.
The lack of transparency, the issues that Larry puts forth in his book, are core factors in why our nation, still reeling with high unemployment and an economy fragile and resting on the injection of reserves from the Federal Reserve, is posed for continued fraud, systemic risk and ongoing breaches of fiduciary duty to American’s retirement nest eggs. Here is the central issue according to Larry:
“… the average American hasn’t fully grasped what was—and still is—happening…”
Larry summarizes the issues that led to the 2008 financial crisis and continues to place our economy at risk:
Wall Street’s regulators, from the SEC to FINRA are captured by Wall Street
Congress is captured by Wall Street, through campaign contributions
The Judiciary is silent.  Without criminal enforcement, the crimes will continue.
Role of FINRA and Self-Regulation in the Securities Industry
In Bed with Wall Street presents some incredible stories of fraud and deceit that the average reader will find hard to believe, in straight-forward easy to read prose, devoid of industry jargon.
Larry Doyle does a thorough job of researching leading economists and market participants on the more obscure, but arguably the most critical issues that are yet to come to light, concerning root causes of the 2008 financial crisis.  In Bed With Wall Street moves the public closer to a core understanding of the role that a self-regulating securities industry played, not only in the auction rate securities debacle, but the Madoff and Stanford Ponzi schemes, followed by MF Global and Peregrine Financial.    
Larry consulted with Professor James K. Galbraith, chair in Government and business relations at the University of Texas at Austin.  Here is Professor Galbraith’s statement:
“Some fraud is inevitable, but in a functioning system it must be rare.  It must be considered—and rightly-a minor problem.  If fraud—or even the perception of fraud –comes to dominate the system, then there is no foundation for a market in the securities.
Larry highlights how “in leading into the current crisis, Wall Street curried favor with academics by paying them to produce research supportive of practices and market developments central to the perpetuation of fraud.” 
These Issues are Not Distant – They Impact the Life Savings of Every American
As the Guardian recently quoted social critic George Monbiot in 2013,
“So I don’t blame people for giving up on politics… When a state-corporate nexus of power has bypassed democracy and made a mockery of the voting process, when an unreformed political system ensures that parties can be bought and sold, when politicians [of the main parties] stand and watch as public services are divvied up by a grubby cabal of privateers, what is left of this system that inspires us to participate?”
Share this book with your friends.  Consider his public policy recommendations. Our strongest recommendation is to get involved in the four most critical ones and start to vet any candidate for 2014 and 2016,  as to how they respond on these issues.  Quiz these candidates. If they do not understand these issues, if they are not fully informed, if they are not for fundamental change to protect the livelihood of every American, do not vote for them.  Look for the candidates that will focus on what matters to your life savings and an ongoing sustainable economy for every American.  These issues that In Bed with Wall Street pose carry far greater impact to the average American, from a bottom line- impact, than the daily-debated Obamacare diatribes.
(1) Eliminate FINRA and all self-regulation in the securities industry 
Our nation’s farmers are well aware of the role of FINRA and National Futures Association self-regulation that contributed to their margin account losses in both the Peregrine Ponzi scheme and the MF Global failure.  Our retirement savers will need more information to connect the dots on how FINRA is impacting your retirement nest egg.

(2) Ban mandatory arbitration
Americans now have over $4.7 trillion in IRA’s and have no access to the court system for breach of fiduciary duty.  They are subject to mandatory arbitration and the securities industry, FINRA, writes the rules and rules on their enforcement, in what Larry has aptly described a “kangaroo court.”
(3) New disclosures by think tanks and academics on who is funding their research. 
Congress often makes decisions on academic studies that have been prepared and paid for by Wall Street,  as Larry has pointed out.
(4) End to Citizens United
The Project on Government Oversight, POGO, has placed Larry’s book on their 2014 Reading List of “10 Books that Matter”.
To purchase Larry Doyle’s In Bed With Wall Street, click here.