It is time to call a halt to the witch-hunt that has followed the tech boom and bust.In the US, when something goes wrong someone has to pay, and the legal option is pursued until someone does pay.
By any standards of common sense the fallout from the tech boom and bust should be drawing to a close. The banks have paid hefty fines to atone for their misdemeanours, they have made grovelling apologies and certain analysts have moved on.
Inside the banks, the rules of engagement are now so tight that the CEO of an international bank needs a chaperone to speak to an analyst. The rules are misdirected anyway because the next banking scandal is bound to happen in another part of the banking operation in a way that has not yet occurred to regulators or bankers. Banking is prone to conflict of interest by its very nature – as an intermediary between investors and capital raisers with both parties needing to be satisfied that they are getting the best deal.
In encouraging dissatisfied retail investors to take their claims to the courts, New York attorney-general Eliot Spitzer is fanning the flames when responsible authorities should be putting the fire out.
Investors were misled by banks during the tech boom no doubt, but in general they were willing lambs to the slaughter. Remember those heady days: it was openly discussed in the market that valuations were unsustainable and that a crash was coming. Investors heard but they did not want to believe because the opportunities for making further profits were still apparent.
It is now time to call a halt to the witch-hunt that has followed the market’s collapse. Transgressors have received the message loud and clear but the principle of caveat emptor must take precedence if US capitalism is to reinvent itself in time-honoured fashion.
