Yes, we're all furious about the Wall Street culture of deception and cheating that has pushed this country to the brink of economic collapse, but maybe it's time to put down our torches and pitchforks so we can think this through. Or at least that's the impulse I got after learning of the verdict in a Brooklyn court against three brokers, including one, David Ghysels, who worked in a Lehman Bros office in Boca Raton.
Ghysels, 51, lived in a West Palm house worth less than a million. His attorney argued that Ghysels had never met the two New York brokers with whom he was supposed to have conspired. And the crime for which he was charged was -- in the heady days of the 2005 bull market -- not just commonplace but behavior that higher-ups endorsed implicitly as a legal corner worth cutting. He was accused of letting clients listen over an open phone line to the "squawk box" -- an intercom system through which trading houses announced large stock orders so that day traders could move just before the stock's price was influenced by that order. An unsavory practice, to be sure, and it constitutes securities fraud.
But in this case, it's apparent that the day traders who profited from the scheme rolled over on the brokers and that the prosecutors were either unwilling to go to the next level by inviting the brokers to implicate their own bosses, or (more likely) those bosses had cleverly insulated themselves against a credible criminal case, meaning the prosecutors had to settle for making an example out of the brokers.
Ultimately, that's what this case looks like -- a handful of guys pays for the sins of a generation. To their credit, jurors had pangs of conscience, as evidenced by a hung jury in the first trial, where the accused were acquitted on all counts but the one for conspiracy to commit securities fraud. And in this, the second trial, a new batch of jurors told the judge on Tuesday that they couldn't agree on the verdict, but the judge coaxed them into a last-ditch effort that finally produced a ruling of guilty. Ghysels and his co-defendants each face 25 years in prison, and one can only hope that when the judge hands down a sentence in late July, he shows a bit of mercy.