Based on Wall Street Advice, Wealth Evaporates Overnight
The new millennium ushered in substantial change on Wall Street. Unprecedented waves of capital began flowing around the world with owners looking for better strategy investments and returns. Per Fortune writer, Carol Vinzant between the 1940’s and mid-1970’s, the ranks of investors grew from two to 25 million. This surplus of capital spurred an onslaught Wall Street advice based on financial instruments that were risky and unproven.Strategy Investments
Wall Street had trouble finding profitable trades in the shifting markets of the times and began offering Wall Street advice on an alphabet soup of exotic mortgage-back-securities (MBS), such as: CDOs, CDOs squared, CMOs and CLOs. Many of these exotic strategy investments contained high percentages of junk debt that was aggressively promoted as sound and acceptable Wall Street advice.
- CDOs (collateralized debt obligations) and their myriad of tranches made the sale of toxic mortgages more respectable as strategy investments by turning subprime mortgages into AAA-rated securities.
- CDS (credit default swaps) enabled the creation of thousands upon thousands of synthetic CDOs that were based on the same underlying pools of subprime mortgages. They multiplied the risk of strategy investments a hundredfold.
- MBS and CDOs became an important vehicle to for fast returns, thereby being part of new Wall Street advice. Strategy investments firms began investing in and selling securities with various credit quality using a sliver of equity and a whole lot of debt.
- Credit swaps linked thousands of firms, so a failure of a few could paralyze the entire system.
Profit Machine
No one wanted to get in the way of the Wall Street advice and their gigantic profit machine. The quick strategy investments rewards were too good.
If you, or a loved one, were lured into strategy investments based on Wall Street advice that hurt you financially, contact business fraud attorneys at Seeger Weiss. Fill out this form for FREE case evaluation.
Our Practices
- Asbestos
- Class Actions
- Commercial Litigation
- Defective Products
- Drug Injury
- Personal Injury
- Securities Fraud
- Toxic Exposure
Current Investigations
- Accutane Side Effects
- Darvon and Darvocet
- DePuy Hip Recall
- Fosamax Femur Fractures
- Muscle Injury
- Sleeping Pill Dangers
- SSRI Birth Defects
- Topamax Birth Defects
- Transvaginal Surgical Mesh and Bladder Slings
- Tylenol Liver Damage
- Zocor/Simvastatin
Pending Settlements
