Chapter 5 The Destruction of Free Enterprise Capitalist System When Infected by Fraud, Corruption, and Bribery

Executive Summary When FECS spins out of human intervention and regulatory control, then it can easily harm and constrain the markets as it happened on Black Friday of October 1929, resulting in the Great Depression, and the September–October 2008 Financial Crisis, when some 17 mega global investment banks ran out of control and lost close to trillion US dollars in market capitalization. This chapter defines, analyzes, classifies, and morally assesses occupational and corporate fraud, corruption and money-laundering, and their other evil forms. When we allow our choices to be driven by passion, choosing thereby to ignore or fail to investigate outcomes, the results are too often flawed and unintended, as the cases of Lehman Brothers, AIG, Freddie Mac, and Fannie May that collapsed around September–October 2008 would attest. While we should condemn abuses within the FECS, one can also seek to understand the origins and originating systems of fraud, corruption, and various forms of deceptions and chicanery, and search for remedial strategies for eradicating these ills of FECS. Several contemporary market cases of fraud, corruption, and bribery will be identified to illustrate the contents of this chapter.