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The Best Way to Rob a Bank Is to Own One: How Corporate Executives and Politicians Looted the S&L Industry Paperback – April 1, 2005

by William K. Black (Author)
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The Best Way to Rob a Bank is to Own One: How Corporate Executives and Politicians Looted the S&L Industry
The Best Way to Rob a Bank is to Own One: How Corporate Executives and Politicians Looted the S&L Industry
$21.68
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The catastrophic collapse of companies such as Enron, WorldCom, ImClone, and Tyco left angry investors, employees, reporters, and government investigators demanding to know how the CEOs deceived everyone into believing their companies were spectacularly successful when in fact they were massively insolvent. Why did the nation's top accounting firms give such companies clean audit reports? Where were the regulators and whistleblowers who should expose fraudulent CEOs before they loot their companies for hundreds of millions of dollars?

In this expert insider's account of the savings and loan debacle of the 1980s, William Black lays bare the strategies that corrupt CEOs and CFOs―in collusion with those who have regulatory oversight of their industries―use to defraud companies for their personal gain. Recounting the investigations he conducted as Director of Litigation for the Federal Home Loan Bank Board, Black fully reveals how Charles Keating and hundreds of other S&L owners took advantage of a weak regulatory environment to perpetrate accounting fraud on a massive scale. He also authoritatively links the S&L crash to the business failures of the early 2000s, showing how CEOs then and now are using the same tactics to defeat regulatory restraints and commit the same types of destructive fraud.

Black uses the latest advances in criminology and economics to develop a theory of why "control fraud"―looting a company for personal profit―tends to occur in waves that make financial markets deeply inefficient. He also explains how to prevent such waves. Throughout the book, Black drives home the larger point that control fraud is a major, ongoing threat in business that requires active, independent regulators to contain it. His book is a wake-up call for everyone who believes that market forces alone will keep companies and their owners honest.

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  1. Print length
    352 pages
  2. Language
    English
  3. Publisher
    University of Texas Press
  4. Publication date
    April 1, 2005
  5. Dimensions
    6 x 0.88 x 9 inches
  6. ISBN-10
    0292721390
  7. ISBN-13
    978-0292721395
  8. See all details
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Customer reviews

4.6 out of 5 stars
98 global ratings

Customers say

Customers find the book informative and well-written. They appreciate the author's clear explanations and insights into the financial crisis. The book is described as a simple, easy read that provides useful information about the subject matter.

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13 customers mention "Author's style"13 positive0 negative

Customers find the book instructive and informative. It provides a powerful overview of the financial crisis and good analysis. The details are well-spelled out, and the material is clearly relevant. Readers appreciate the author's ability to show the connections between various players and Charles Keeting. While some parts of the story left them open-mouthed, overall they find the book sobering, astonishing, and an important work for its historical value.

"...The author writes in a concise, clear way. And although you know the final outcome, he makes it a page-turner along the way...." Read more

"...I found it an exciting story as the battle for accountability ebbed and flowed, and the courage of the 'few' against the established way of doing..." Read more

"...so at times seems to read like a lecture... but the lessons and history are valuable enough to overcome those stylistic shortcomings...." Read more

"...This is an important work, not only for its historic value in explaining this particular outbreak of white collar crime in the savings and loan..." Read more

7 customers mention "Readability"7 positive0 negative

Customers find the book easy to read and educational. They say it's a great book by a former regulator.

"...This book is well worth reading if you are interested in understanding how we came to our present situation...." Read more

"...manner and although it covers complex subjects it was easy and interesting to read...." Read more

"...at every step it exposes, but it is very educational and non demanding read about what is normally a very dry subject...." Read more

"...This book is a must read to get a good understanding of what happened in the 90's and leading up to the twenty first first century trillion dollar..." Read more

Top reviews from the United States

  • Rita Sydney
    5.0 out of 5 stars Sadly, still relevant
    Reviewed in the United States on April 21, 2009
    Verified Purchase
    A couple times I put off reading this book because of it's subtitle (looting of the S&L industry). I wanted to read about what I thought of as more current issues like the problems in the financial industry.

    How glad I now am to have read The Best Way to Rob a Bank is to Own One.

    The book does show step by step how the fraud in the S&Ls was perpetuated. Mr. Black, who was part of the agency that was supposed to regulate the S&L industry, gives the insider's perspective of what happened.

    He's also interested in detailing the factors in the environment that made it possible for the fraud to occur, be covered up, and finally collapse. Factors ideological (regulation is not needed), budgetary (under-staffed, inexperienced regulators), and political (the power of bought politicians).

    This makes what happened in the 1980's feel contemporary. There were patterns then that seem familiar to what is happening these days. (I am writing in April 2009.)

    For example, Mr. Black shows how the S&L fraud was abetted by compliant accountants. Nowadays we've learned how compliant accounting firms falsely rated financial securities to the benefit of the bankers. And just recently political pressure was successfully brought to bear on the FASB (Financial Accounting Standards Board) to loosen up the Mark-to-Market accounting rules. To what end we will have to wait and see; after reading Best Way to Rob I am not sanguine.

    I can't avoid the conclusion that the environment that resulted in corruption 20 years ago is still with us. And I begin to think that Obama's economic advisors will not change things.

    So, this book is sobering. Parts of the story left me open-mouthed. Like the fact that Charles Keating continued to operate, and loot, for 2 years after his illegal practices were uncovered. In fact, he got the agency that was supposed to regulate S&L's to agree to a cease and desist order against itself: the agency agreed it would not take any action against Keating !!!

    The author writes in a concise, clear way. And although you know the final outcome, he makes it a page-turner along the way. I kept reading and reading to follow what happens next.

    One of the lessons Mr. Black would like to get across is that FRAUD HAPPENS. Don't be fooled by back-slapping, look-you-in-the-eye charismatic fellows. Fraud is not accidental. It will arise when conditions make for opportunities.

    He's convinced me.
    34 people found this helpful
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  • Ames Gilbert
    5.0 out of 5 stars We learned nothing from the S & L crisis.
    Reviewed in the United States on February 17, 2014
    Verified Purchase
    Bill Black shows how internal control fraud by leaders of the saving and loan companies worked, and how they fooled or co-opted the regulators, big accounting firms and politicians. I found it an exciting story as the battle for accountability ebbed and flowed, and the courage of the 'few' against the established way of doing things is rare, astonishing and uplifting.
    Then he explains how we have learned little and done nothing to protect ourselves against more frauds after that crisis was somewhat resolved. Instead, we encouraged more criminality by leaving most of the loopholes in place, deregulating still further in the name of blind ideologies, and refusing to seek out and punish the individuals responsible. Which brings us to the present ongoing rolling disaster. The criminals are still in charge, but now they are applauded and supported at the highest levels, there have been few prosecutions, and the vast scale of the looting has hollowed out our economy. The pathetic fines levied by the 'regulators' are just now a cost of doing business, just another expense to write off against taxes. No individuals are held to account, and the corporations they work for have now become 'people', with the added benefit of being immortal sociopaths.
    This book is well worth reading if you are interested in understanding how we came to our present situation. Bill Black and his team brought the S & L crisis under control, and the same methods could bring the present crisis under control---if there was the political will. Well written by the leading insider.
    31 people found this helpful
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  • M. FRANTZ
    5.0 out of 5 stars Wonderful insight!!
    Reviewed in the United States on August 3, 2013
    Verified Purchase
    Black does a wonderful job explaining in detail how control fraud's walk and talk. His work is key to understanding how relevant honesty in business dealings are and how this single factor has the ability to crush the greatest economy on earth. The most important lesson Black teaches us is; “A CEO who has been honest for decades may react to the fear of failure by engaging in fraud… Morals matter, but people are capable of doing immoral acts while believing they are morally superior. I believe that part of the answer is that it is so hard to accept that a CEO can be a crook and that, because he owns a substantial stock in the company, the risk increase that he will engage in control fraud if the firm is failing. This seems counterintuitive to most people. If officials understood control frauds, they would be more willing to see CEOs as potential criminals and to maintain the kind of healthy skepticism that could reduce future scandals… The person with the greatest incentives to engage in fraud is the CEO owner of a failing firm… Some of us must remain intensely skeptical so that others can continue to trust..” Our country greatest threat is not from the middle East or Central Asia, rather from within. We must build in safe-guards to assure that our economy will be safe from the fear of failing, the underlying reason we turn to fraud. Black has it right and it would do well for this book to be read and studied in all forms of academia. My deepest thanks to Black from giving us these amazing insighs.
    3 people found this helpful
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Top reviews from other countries

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  • KarQiPidhi
    5.0 out of 5 stars Interessant
    Reviewed in Germany on February 23, 2019
    Verified Purchase
    Tolles buch!
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  • weir jan
    5.0 out of 5 stars Why economics cannot be left to economists
    Reviewed in Canada on March 25, 2017
    Verified Purchase
    Black gives the best analysis of the S&L Crisis and why economists' analyses of it and the 2008 Crisis are wrong. Essential reading for anyone interested in our financial system and how to fix it.
    Report
  • Rafael Morís Pablos
    5.0 out of 5 stars Explicación del control que tienen los bancos sobre los políticos y todo el sistema, tanto en EEUU como en España
    Reviewed in Spain on August 20, 2015
    Verified Purchase
    Excelente (aunque quizá demasiado detallada) explicación del control que tienen los bancos sobre los políticos y todo el sistema, tanto en EEUU como en España
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  • DOPPLEGANGER
    5.0 out of 5 stars CONTROL FRAUD EXPOSED
    Reviewed in the United Kingdom on April 4, 2015
    Verified Purchase
    The author Bill Black was well placed to write about the S and L scandal. He was a central figure in exposing corruption and was responsible for exposing House Speaker Jim Wright, and 5 Senators (the Keating Five) including John Glenn and John McCain of doing favours for hopelessly insolvent S and L's in return for contributions and other perks.

    The book introduces and explains the widespread use of Control Frauds in which people such as Charles Keating, Don Dixon, Ranbir, Sahani and others uses the entity he or she controls as a weapon to commit fraud and as a shield to defend against detection and prosecution.

    He was Litigation Director for the Federal Home Loan Bank Board, and subsequent similar regulatory executive positions and was much involved in the regulation of the 'Reagan' era deregulated S and L business and tells of the efforts made by his original boss Ed Gray and his team to limit the horrendous cost to the US taxpayers of the corruption and fraud that was being perpetrated within the 'Control Frauds'. The irony being that these efforts to minimise the loss ot the Taxpayers was not only opposed and frustrated by politicians, the Washington bureaucratic machine and trade associations, but by some of some of Black's colleagues such as Gray's successor the ineffective Washington pen-pusher Danny Wall, and strangely enough qualified and experienced attorney, Rosemary Stewart, Head of Enforcement. Despite a huge mass of factual evidence provided to her of widespread fraud within companies such as Charles Keating's Lincoln Savings she resolutely continued her defence of the arch control fraudsters she persisted in obstructing Black and others efforts to close them down and curb the flow of losses. The irresponsible failure of the likes of Wall and Stewart cost the taxpayer many, many $billions of unnecessary losses. One is incredulous as to why they chose this course of non-action in the face of the overwhelming facts....unfortunately Black does not seem to know the reason either. It leads one to suspect all sorts of theories.

    The book also highlights the loss of collective responsibility in the great law firms, accounting firms, investment banks and professional appraisers, that permitted some of their partners to conspire with criminals to allow and condone the conspiracy to defraud on such a massive scale.

    Black deals with the subjects of Control Frauds in great depth giving his explanations on the reasons on why it tends to occur in waves that make financial markets deeply inefficient, and how to prevent such waves, and throughout stresses often the larger point that control fraud is a major, ongoing threat in business that requires active, independent regulations and effective regulators to contain it.

    A superbly informative, interesting and still pertinent book that, alas, does little to suggest that this could not happen again. Why look at the 2008 Credit Crunch!
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  • Andre Richier
    4.0 out of 5 stars Un must sur la "criminalité" économique au sommet
    Reviewed in France on October 17, 2013
    Verified Purchase
    Ce livre dissèque avec beaucoup de détails les phénomènes de fraudes massives qui sont à l'origine de désastres économiques et financiers. Le cas précis qui est présenté (la faillite des caisses d'épargne aux USA) représente une excellente illustration du phénomène de "criminalité" économique
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