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The Best Way to Rob a Bank Is to Own One
William K. Black
How Corporate Executives and Politicians Looted the S&L Industry
University of Texas Press
April 2008
On Sale: April 1, 2008
351 pages ISBN: 0292706383 EAN: 9780292706385 Hardcover
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Non-Fiction
"Persons interested in the economics of fraud, the S&L
debacle, the problems of financial regulation, and
microeconomics more broadly will find this book to be very
important. It is a marvelous combination of insider
experiences, well-grounded generalizations, and the
foundations of a broader research agenda. It merits a wide
readership and, one hopes, sustained reflection on its
arguments and conclusions." —Journal of Economic Issues "This is an extraordinary book....No other account gives a
complete picture of the control fraud that occurred in the
S&L crisis....There is no one else in the whole world who
understands so well exactly how these lootings occurred in
all their details and how the changes in government
regulations and in statutes in the early 1980s caused this
spate of looting....This book will be a classic." —George A. Akerlof, University of California, Berkeley,
winner of the 2001 Nobel Prize for Economics "This book is a must-read for anyone wanting to understand
one of the darkest chapters in financial history in
America. As Black clearly and expertly shows, the lessons
we never learned are still important....His book more than
stands on its own against any other published on the S&L
crisis and is the most definitive account available." —Henry N. Pontell, University of California, Irvine,
coauthor of Profit Without Honor: White-Collar Crime and
the Looting of America "William Black hits the bull's eye with his development of
the concept of 'control fraud' in The Best Way to Rob a
Bank Is to Own One. Calculated dishonesty by people in
charge is at the heart of most large corporate failures and
scandals, such as the savings and loan debacle, as Black
points out. While people chase around for other
explanations, these control fraud criminal acts are right
there for all to see. Black does a great service by making
us focus on this reality. We will better understand and
possibly prevent the scandals as we see them in the
spotlight of control fraud." —Elliott Levitas, former Commissioner, National Commission
on Financial Institution Reform, Recovery, and Enforcement
(FIRREA), and former Member of Congress "At its root the S&L scandal is about corrupting self-
interest, political and economic. Bill Black's seminal
treatment of the subject amounts, in effect, to a clarion
call for the return to an old-fashioned notion of public
interest. Without such an ethic, analogous transgressions
will take place again and again. In this context, the story
Black weaves is both historical and prophetic." —Congressman Jim Leach, R-Iowa 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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