Dirty Money is a documentary series that premiered on Netflix in January 2018. The series focuses on different case studies of corporate corruption. The documentaries delve into the political and cultural causes behind the key events in each case, motivations of the individuals involved, and the way that society has been impacted by these situations, some of which remain under investigation or legal challenge. While all the episodes are interesting to study for general themes of corporate compliance and/or ethical culture and organizational integrity, four of the episodes are especially relevant.
Frontline is a documentary series that has been broadcast by PBS since 1983. The series covers a broad range of social, political, and historical topics. Among these documentary programs have been several episodes that have covered financial crises or compliance issues in the markets or at organizations. These topics range from the 2008 global financial crisis to an overview of corruption and unethical behaviour on Wall Street to fraudulent and misleading practices within specific companies that contributed to market instability and economic collapse.
To Catch A Trader and insider trading – This 2014 episode covers the history of SAC Capital Advisors, a group of hedge funds founded in 1992 by Steven A. Cohen which was very successful for many years but declined after numerous investigations by the US Securities and Exchange Commission for insider trading. Several former traders were indicted by the US Department of Justice and the firm itself pled guilty to insider trading charges, subsequently shrinking away after returning external investors’ money to them and divesting the rest of its capital. SAC Capital Advisors no longer exists as of 2016, but the divestment process is ongoing and continues to raise questions about conflicts of interest and ethical practices at the firm. As for Cohen himself, he runs what was once SAC Capital Advisors as a family office and remains active in the financial industry despite his failure to supervise at SAC.
Dot Con and financial markets fraud during the dotcom bubble – From 2002, this episode looks at the “dotcom bubble” of the late 1990s, when the financial markets were crazy for new internet companies and their IPOs were aggressively marketed to the investing public. At the time this was a totally new frontier and the growth of the bubble was fuelled by aggressive allocation practices in the IPO process. Did the eagerness to exploit this new market tip over into fraudulent or misleading handling of the IPOs? In the rush to take companies public, risks were certainly ignored or unknowingly assumed by investors. Transparency in the marketplace was really lacking, and no one wanted to miss on profits to slow down and question whether what was going on was appropriate or advisable. This is a formula which is bound to repeat over and over again in future financial market advances and collapses.
Inside the Meltdown and the causes of the 2008 global financial crisis – This 2009 documentary starts with the seeds of fear that were sown in late 2007 about the effect that the bursting housing bubble would have on Wall Street investment firms. Saddled with bad debt and hounded by rumors of instability, in 2008 financial organizations began to decline and collapse precipitously. First Bear Sterns, and then Fannie Mae and Freddie Mac, failed and needed rescue. Then finally in September 2008 came Lehman Brothers – and from the Treasury Secretary Henry Paulson, who was subject to immense political pressure and criticism from the handling of prior crises, there came no bailout. In the aftermath of this, the financial crisis unfolded and ensued. Questions still remain about how this happened so quickly and severely, who caused or could have avoided it, and whether the plans to fix it and avoid it happening again have been effective.
Money, Power and Wall Street and the effects of the 2008 global financial crisis – In a sense picking up where the previous documentary left off, this 2013 episode looks at the often problematic efforts to recover from the financial crisis. In the many efforts to repair the global economy and strengthen the system to withstand future crises that are similar or more several, the financial markets and the governments that regulate and supervise them have struggled against themselves and each other. With investors and taxpayers all over the world on the hook for the risk and the bill, bold decisions as well as failures to act have characterized the rescue and rebuilding process, and continue to raise doubts about the resilience for the future.
The Warning and failure to regulate the derivatives market – This 2009 documentary looks at the financial crisis not from the perspective of the firms that weakened the market or collapsed within it, but from one segment, the derivatives market. This market is mysterious and key regulators took a hands-off position in investigating or managing it. The fears were that regulating the market could lead to financial crisis; it’s possible that not regulating it was one of the key causes of the downturn, in the end. These complex dynamics which prevented changes in the risky derivatives market still exist in governments and the markets today. Failing to change or move on from these to close the regulatory gap suggests that future crises are inevitable.
These are only just some Frontline episodes from over the years of the program that have touched on historically important events and issues relating to financial crisis and corporate compliance. These compelling documentaries provide a rich and informative, yet accessible, view into the complex and wide range of these topics.
The Great Recession, which began in 2007-2008 with the collapse of the subprime mortgage market and led to an international banking crisis, offers many lessons for compliance practitioners and enthusiasts alike. Many documentaries have been produced in the ensuing years to offer new insights on the crisis and its causes.
American Casino and the origins of the subprime collapse – The filmmakers of American Casino started their work in 2008 with a theory that the housing market was in trouble. Over the year that they filmed, this idea took root in reality and unfolded before them. The 2009 documentary that resulted offers a vivid explanation of how the subprime mortgage market evolved and then fell apart. The stories of average Americans who held the mortgages that were underlying the bonds created by big investment firms humanize the origins of the crisis and help to ground the actions in the financial markets by connecting them to the many people that were affected.
Inside Job and non-disclosure of conflicts of interest – This 2010 documentary reaches back into the international origins of the financial crisis, to begin with an look at the collapse of the Icelandic banking system. One of the movie’s principal assertions is that academics and scholars who are professors at many of the prominent educational institutions have conflicts of interest due to their financial ties to firms such as Goldman Sachs and other large market makers. The film’s argument suggests that these conflicts of interest are not subject to mandatory disclosure and so the economists express opinions about investments and financial systems which cannot be transparently evaluated.
Capitalism: A Love Story and the dangers of deregulatory trends – Michael Moore’s 2009 documentary takes a wide view on general contemporary economic conditions in the United States, ethically questionable practices of major corporations, and the status of the American worker in modern capitalism. Germane to the subject of the 2008 global financial crisis, Moore takes a look at the lending practices of Countrywide, one of the main players in the subprime lending practices that led to the market collapse and ensuing crisis. Countrywide operated in an generation of regulatory relaxation, leading to unduly risky practices of giving loans to people who could not reasonably afford them as well as giving discounts and special deals to politicians and regulators in hopes of keeping the good times rolling.
The Flaw and the evolving state of modern American capitalism – A good companion movie to Capitalism: A Love Story, this 2011 documentary focuses on explaining how the consumer society in the United States has a symbiotic relationship with the markets, at the expense of the American citizen whose main value in society becomes determined by spending power. In this dynamic, the rich get richer while the poor stay poor and the middle class drifts ever downward, with interventions such as the easier extension of lending in the pre-2008 years only seem to present a possibility for upward mobility for them, but rather just create financial crises where they bear the brunt of the losses.
Money for Nothing: Inside the Federal Reserve and the cyclicality of major financial crises – The ebb and flow of regulatory pressures in the United States are enabled by the lack of understanding most Americans have about what the Federal Reserve System is and how its policies impact the economy and the markets. This 2013 documentary suggests that these policies had a major role in the 2008 financial crisis and will continue to contribute to the creation of bubbles that culminate in future crises. The firm suggests that awareness of the public and citizens’ engagement in activism for more accountability and greater transparency by the Federal Reserve System are critical for protecting society from ever-greater financial crisis in the future.
These are just a few examples of documentaries which can provide an informative and compelling view into the events of the 2008 global financial crisis. For years to come there will surely be many more such documentaries to add further insights to the historical record on the Great Recession.