Bloomberg contributor William D. Cohan writes that this is particularly troubling because Wall Street is similar to the military: There is no upside for anyone working in finance to do anything but to follow the orders given by the bosses. The idea of a “rogue trader” is really a myth. The goal at every firm is always to make more money in any way that is legally defensible -- by selling more mortgage-backed securities, by doing bigger and bigger mergers-and-acquisition deals or by making a larger and larger bet on the direction of an obscure debt index.
When things go well - the firm lands a big underwriting or a high-profile merger or executes a profitable trade - there is no shortage of people around to claim credit. Of course, when something goes terribly wrong - see 'Whale, London' or 'Synthetic CDO, Abacus - the senior executives disappear from the scene faster than cockroaches when the light is turned on. In return, employees get paid more working on Wall Street - without putting any personal capital at risk - than they can at almost any other job on the planet. This is not a subject open to debate on Wall Street. This is the way it is. If you don’t like that bargain, you leave. (Sorry, Greg Smith.).
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William D Cohan
William D. Cohan is the author of the recently released Money and Power: How Goldman Sachs Came to Rule the World and the New York Times bestsellers House of Cards and The Last Tycoons.
Cohan is a contributing editor at Vanity Fair and writes frequently for Financial Times, Fortune, The Atlantic and The Washington Post. He worked on Wall Street as a senior mergers and acquisitions banker for 15 years. He also worked for two years at G.E. Capital. Cohan is a graduate of Duke University, Columbia University School of Journalism and Columbia University Graduate School of Business. The Last Tycoons won the 2007 Financial Times/Goldman Sachs Business Book of the Year Award.