An interesting white paper just came out from a firm called Greycourt and Company, that dishes out the truth on the ultimate cause of the financial crisis.
The authors write that the financial crisis was precipitated by "the disappearance of any sense of fiduciary responsibility to the ultimate client." One brokerage firm was selling CDO paper to its clients, while simultaneously shorting the same product.
Another major ethical lapse was pushing auction rate securities, and touting them as safe as cash. When the weekly auctions began to fail, some of the firms walked away from clients.
It seems as if this has always been the history of Wall Street - pretending that what you are offering is for the benefit of the customer. Just read the book Reminiscences of a Stock Operator, and you will know what I mean.
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