Another View: Lessons From Pecora Were Ignored

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New York Times Dealbook

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For 16 months in the depths of the Great Depression, Ferdinand Pecora, a former New York prosecutor turned Senate inquisitor, captivated the country. He chronicled how, in the run up to the 1929 crash, Wall Street’s elite financiers manipulated stocks, dodged taxes and collected enormous bonuses for peddling shoddy securities to unsuspecting Americans. The sensational headlines galvanized public opinion for reform, giving Congress the political cover it needed to pass the first federal securities laws and the Glass-Steagall Act. “We built completely on his work,” one of the drafters of those laws acknowledged.

In May 2009, Congress evoked the Pecora hearings when it created the Financial Crisis Inquiry Commission, a panel chaired by Phil Angelides. A former California treasurer, Mr. Angelides said that he kept Pecora’s memoirs near his bed and that his goal, like Pecora’s, was to “deepen the national dialogue about the need and the shape of reform.” Last month, the commission held its last hearing. Few will notice its absence. The panel’s investigation has generated nowhere near the attention of the Pecora hearings and had no discernible influence over the financial reforms passed this year.