Wednesday, February 08, 2006


(WSU Rome Bureau) Representatives of the SEC, NASDAQ, NYSE and AMEX arrived at the Vatican today and met for over two hours with various papal officials. The twenty person US delegation hopes to arrange an audience with the Pope. The US regulators are seeking from the Pope a blanket absolution for the act of lying that would cover all individuals directly involved in the origination, sales and trading of securities within the United States.

"Let's face it," said Martin Stark, SEC representative, "lying is a bedrock principle of the securities business. If everyone told the truth, business would come to a halt."

The Vatican visit raises the question, Why now? If lying has always been a staple of high finance, then why this sudden feeling of crisis that necessitates an act of the Pope?

An in-house psychologist at a large investment bank told the WSU that the number of individuals seeking counseling for the effects of constant lying has dramatically increased the past three years. "I know it's hard to believe," the psychologist said, "but some people on Wall Street do have a conscience. The bad news is that workers in the securities biz are lying to such an extent that feelings of guilt are affecting their job performance The good news is that more of them are seeking counseling to address the problem instead of indulging in the typical Wall Street escapist behavior of excessive drinking, drug-taking and whore-mongering."

The lying has increased, according to this psychologist, in proportion to the need to succeed and compete. The bull market the past three years has intensified that drive with a concomitant increase in lying.

She cited the case of an M&A banker who sought her help a couple of months ago. "The banker was morally exhausted from prodding clients to raise their bids by telling the same lie over and over, namely that Carl Ichan was 'sniffing' the target company and preparing a bid substantially higher than the client's. The only thing that surprised him more than how easily he lied was how easily his clients continually swallowed the lie, hook, line, sinker."

Of course, lying goes with the territory when it comes to sales and trading. One high yield bond salesman told WSU that he never thinks much about the lies that he tells on a daily basis to his clients. "So I tell all my guys that our new issue deal is two times oversubscribed when we're not even halfway to a book," he said with a shrug. "If I didn't lie to them, the deal would never get done. I lie to them, they buy the deal, and usually it does end up being oversubscribed and trades up after the break. Lies are the oil that greases the wheels, baby." The salesman added the over-used cliche, "I'm here to sell bonds, not the truth."

But not everyone is so nonchalant about lying. A portfolio manager of a large bond fund described how he suffered pangs of conscience confessing to his priest. "I'm dyed-in-the-wool Catholic. I go to confession almost daily. And almost daily, I confess the lies. You know, basic stuff, like how I tell a salesman that I bought a bond at such a price when the truth is that I bought it much higher. Or when I tell the pricing service to use a certain broker for pricing when I know that broker is giving me a too-high price for that bond just to ingratiate himself to me. Finally after months of confessing this daily, the priest said to me, 'Hey, Rich, I think it's time you get some real help and talk to a shrink.'"

SEC's Stark said that the Vatican visit was prompted by the large number of Catholics in the securities business. "We have a lot of workers of Italian and Irish ancestory in this industry and the psychological cracks from lying have been more overt in this group than others. Thus the need to get an absolution from Big Pappa. We need these workers to go about their business and continue lying with a clear conscience. If they mope around worrying that their jobs will consign them to the inner-most fiery circles of Hell, then their productivity drops and the markets don't function as well as they should."

Stark said that the regulatory bodies plan to make similar requests to the appropriate authorities in other denominations and religions. "Even the Dalai Lama is on the list," he said. "We want all morally upstanding, God-fearing, religious people everywhere to acknowledge that, hey, sometimes the truth really doesn't set you free but only makes you poorer."

When a Vatican official was asked if the delegation would be granted an audience with the Pope, he answered archly, "If they do, they better be prepared to have their knuckles smacked with a wooden ruler."

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