Diffusion of Fraud Through Subprime Lending: The Perfect Storm

Patterson, Laura A.; Koller, Cynthia

doi:10.1108/s1521-6136(2011)0000016005

Cited by 5 publications

(8 citation statements)

References 12 publications

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“…Across firms, did fraud spread through leadership and imitation, or emerge independently from parallel structural positions (Patterson and Koller 2011;Pinto, Leana, and Pil 2008)? It thereby points toward several trajectories of productive future research.…”

Section: Discussionmentioning

confidence: 99%

“…For example, regulatory relaxation in the financial services industry occurred as much as 10 to 20 years prior to the financial fraud we document (Crotty 2009;Immergluck 2009;Koller 2012;Patterson and Koller 2011). Specifically, by focusing on regulatory and technological aspects of an environment that all firms occupy, they fall short of explaining the timing and distribution of malfeasance.…”

Section: Theories Of Financial Fraudmentioning

confidence: 91%

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The Causes of Fraud in the Financial Crisis of 2007 to 2009

Fligstein

Roehrkasse

2016

Am Sociol Rev

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The financial crisis of 2007 to 2009 was marked by widespread fraud in the mortgage securitization industry. Most of the largest mortgage originators and mortgage-backed securities issuers and underwriters have been implicated in regulatory settlements, and many have paid multibillion-dollar penalties. This article seeks to explain why this behavior became so pervasive. We evaluate predominant theories of white-collar crime, finding that theories emphasizing deregulation or technical opacity identify only necessary, not sufficient, conditions. Our argument focuses instead on changes in competitive conditions and firms’ positions within and across markets. As the supply of mortgages began to decline around 2003, mortgage originators lowered credit standards and engaged in predatory lending to shore up profits. In turn, vertically integrated mortgage-backed securities issuers and underwriters committed securities fraud to conceal this malfeasance and enhance the value of other financial products. Our results challenge several existing accounts of how widespread the fraud should have been and, given the systemic crimes that occurred, which financial institutions were the most likely to commit fraud. We consider the implications of our results for regulations that were based on some of these models. We also discuss the overlooked importance of illegal behavior for the sociology of markets.

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Section: Discussionmentioning

confidence: 99%

Section: Theories Of Financial Fraudmentioning

confidence: 91%

The Causes of Fraud in the Financial Crisis of 2007 to 2009

Fligstein

Roehrkasse

2016

Am Sociol Rev

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“…But also present was conflict of interests (Ferguson, 2010;Federal Bureau of Investigation, 2011), irresponsibility (Brown et al, 2010) and other various types of damaging behaviours (see Dobovšek et al, 2015;Dobovšek and Slak, 2016a). Some even go so far as to characterise the whole mortgage bubble and securitisation market as a Ponzi-scheme (Mah-Hui, 2008;Patterson and Koller, 2011;United States Senate, 2011).…”

Section: Notesmentioning

confidence: 99%

Economic crisis and “white informal economy” – a slippery slope

Dobovšek

Slak

2017

IJSSP

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If you would like to write for this, or any other Emerald publication, then please use our Emerald for Authors service information about how to choose which publication to write for and submission guidelines are available for all. Please visit www.emeraldinsight.com/authors for more information. About Emerald www.emeraldinsight.comEmerald is a global publisher linking research and practice to the benefit of society. The company manages a portfolio of more than 290 journals and over 2,350 books and book series volumes, as well as providing an extensive range of online products and additional customer resources and services.Emerald is both COUNTER 4 and TRANSFER compliant. The organization is a partner of the Committee on Publication Ethics (COPE) and also works with Portico and the LOCKSS initiative for digital archive preservation.

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“…Ahora bien ese riesgo en realidad no se eliminaba, sino que se externalizaba a otros actores del sistema financiero, los cuales no estaban sujetos a regulación y supervisión, quedando con ello fuera de control ese riesgo externalizado. Además, se van revendiendo de forma encadenada combinaciones de esos paquetes entre diferentes intermediarios, y con ello se pierde la noción del riesgo por parte de los sucesivos inversores que adquieren los productos (Haspeslagh, 2010;Otte, 2010;Patterson;Koller, 2011).…”

Section: Análisis Informacional De La Crisisunclassified

“…En realidad, la crisis actual ha sido adoptada como tal incidente crítico no solamente en el ámbito de la economía (Lane, 2010; Lousboury; Hirsch, 2010; De-la-Dehesa, 2011), sino también en otros campos de las ciencias sociales como la ética (Paulet, 2011) o la criminología (Patterson;Koller, 2011). Se ofrece aquí un enfoque que pretende integrar economía y gestión de la información, aportando elementos de reflexión que contribuyan a la prevención de futuras crisis, en la línea de lo apuntado por Buchanan (2009); Krugman (2009) e Inerarity (2011).…”

Section: Introductionunclassified