The great recession of 2009 brought with it 4 times the annual average of Ponzi scheme collapses (according to an AP report). Headlined by Bernie Madoff's $50 Billion blowout, there were over 150 Ponzi's revealed in 2009 compared to around 40 in 2008.
Was the Ponzi collapse a result of better governance or stricter enforcement? No. The economic situation created conditions which made it impossible for the schemes to continue. We still need better corporate governance, enhanced enforcement, and improved detection.
Tuesday, December 29, 2009
Monday, December 28, 2009
2009 - The Great Recession, 2010 - The Great Litigation?
An article this morning in the New York Times reported that 4.7 million cases were filed in the New York court system - the most cases ever filed. Most of these cases were either directly (bad debts and soured deals) or indirectly (domestic violence as a result of lost jobs and foreclosures) a result of the financial crisis. The article stated:
"Judges and lawyers say the tales behind any number of cases, including low-level offenses like turnstile jumping and petty theft, are often a barometer of bad times. And they said that the data showed that courts nationally would be working through the recession’s consequences for years, much as they did with the flood of cases stemming from the crack cocaine epidemic of the 1980s, even after the epidemic had slowed."
Read the article for yourself and make up your own mind -
NY Times Article.
"Judges and lawyers say the tales behind any number of cases, including low-level offenses like turnstile jumping and petty theft, are often a barometer of bad times. And they said that the data showed that courts nationally would be working through the recession’s consequences for years, much as they did with the flood of cases stemming from the crack cocaine epidemic of the 1980s, even after the epidemic had slowed."
Read the article for yourself and make up your own mind -
NY Times Article.
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