The Financial System is Corrupt

The financial system is based on obfuscation and deceit, and it is ruining the world. The stock market is a rigged game that siphons money from the majority of people and gives it to the wealthy. The finance system rewards the wrong things – it is counterproductive to the common good. We need to build a new financial system that benefits everyone, not just a few.

The Problem Of Exploitation In The Finance System

The finance system is exploitative because it benefits the wealthy while the poor get poorer. This is one of the main contributors to the growing inequality in the world. Banks are most profitable when they make money off of people, not when they help them grow their wealth.

The finance system is based on greed and fear, which leads to instability in the economy.

Some of the ways the corrupt financial system hurts average Americans:

  • Bank fees are outrageous and unnecessary. Banks are constantly nickel and diming consumers.
  • Credit card companies have a duopoly they exploit for unjustified profits.
  • The interest rates on loans are unfair.
  • The finance system allows the wealthy to control the government and make laws that benefit them.
  • Inequality and discontent lead to social unrest.
  • It just makes things worse and worse.

We need to create a new financial system that is fair for everyone.

Defining Financial Corruption

One of the most pervasive and damaging forms of corruption is financial corruption. Financial corruption happens when individuals in positions of power abuse their authority. They obtain financial gain for themselves or others, usually at the expense of the public good.

This can include activities such as paying or taking bribes, anti-competitive aquisitions,  extorsion or engaging in fraud and embezzlement. Through legal chicanery and legal obfuscation, the big financial players extract more and more money from productive sectors of the economy and keep it for themselves.

Financial corruption can have a devastating impact on economies, societies, and individual lives. It can lead to the exploitation of the most vulnerable members of society, and it erodes trust in government and institutions.

The fight against financial corruption requires a concerted effort from individuals, organizations, and governments. It is only by working together that we can hope to stamp out this damaging form of corruption.

Corruption is a Global Problem

While financial corruption is a global problem, it is often exacerbated by cultural factors. In some cultures, bribery and nepotism are considered acceptable forms of doing business. In others, financial exploitation of the poor or vulnerable is seen as a way to get ahead. Corruption can also be fueled by social inequality when those who are already wealthy and powerful use their positions to further enrich themselves at the expense of others.

There’s a lot of money to be made through illegal means. People abuse their positions for personal gain in an unethical manner. This damages many people and makes them unhappy.

In many cases there is no accountability. Often, because the financial powers wrote the laws and pay lawyers the most money, they don’t face consequences for behavior we all find abhorrent.

It is not cool when they just take people’s money for no real reason, just because they can.

Problems Caused by Corruption

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Corruption Inflicts Enormous Harm

Financial corruption is one of the most pressing problems facing society today. It harms individuals, businesses, and governments alike, costing economies billions of dollars every year. The wasted resources due to corruption is staggering. It undermines economic development, fuels social unrest, and corrodes the trust that citizens have in their government.

With their ill-gotten gains, the wealthy can all but run the government. The influence of big money on the government is one of the biggest impediments to improving the lives of Americans.

Notable Examples of Financial Corruption

Man there is so much nonsense they get up to. It’s crazy. Here are some of the most notable examples of financial corruption. I had the AI help me come up with some of these. Bad guys – please don’t sue me.

The Subprime Mortgage Crisis AKA the Great Financial Crisis

The subprime mortgage crisis was a financial crisis that began in the United States in 2007. It involved the collapse of the housing market, as well as the financial institutions that had invested heavily in subprime mortgages. This led to widespread economic turmoil and resulted in millions of people losing their homes.
It was a real mess that took years to recover from and created populist protests including Occupy Wall Street and the Tea Party. Although some banks got slap on the wrist fines, zero of the individuals who caused the meltdown were held responsible. Read more about the crises from the Federal Reserve.

Conflict of Interest at the Highest Level of Government

In late 2021, Business Insider published extensive reporting regarding the financial dealings of top players in Washington in their Conflicted Congress investigation. They examined “conflicts-of-interest, potential self-dealing, and disregard for a decade-old law designed to prevent corruption at the highest levels of American government.” Their investigation found

57 members of Congress and 182 senior-level congressional staffers who have violated a federal conflicts-of-interest law.”

While financial corruption in Washington is always a top concern for Americans, it is not such a high priority for those who are benefiting.

Watch Nancy Pelosi Pull a DAVE CHAPPELLE to escape questioning about her husband’s questionable stock trading.

The Bernard Madoff Ponzi Scheme

The Bernard Madoff investment scandal was one of the most brazen financial frauds in history. Madoff, a longtime, well-respected financial advisor and investment manager, ran a Ponzi scheme for decades in which he promised investors large returns on their investments but instead used their money to pay off earlier investors. When the scheme was finally revealed in 2008, it resulted in the loss of billions of dollars for many people, as well as Madoff’s imprisonment. You can read more about Madoff at Corporate Finance Institute.

There’s something else going on with the ole Bernie story… Something rather sinister. I understand regulators are often useless, but it seems unlikely that the biggest banks on the planet and other powerful people didn’t know what was going on.

The LIBOR Rate-Rigging Scandal

The LIBOR rate-rigging scandal was a financial scandal that rocked the world in 2012. It involved several large banks, including Barclays, JPMorgan Chase, and HSBC, colluding to manipulate the LIBOR rate (an important global benchmark rate) to increase their profits. The scandal led to billions of dollars in fines and settlements for the banks involved, and criminal charges for some of the individuals involved. Read more about the LIBOR scandal from the Council of Foreign Relations.

It was a brazen attack on the international finance system and a clear indication that there is always systemic risk hiding under the surface. As much as financial types like to think they know more than the rest of us, the reality is that they are just as in the dark about how the money system “works” as the rest of us.

Wells Fargo Fake Account Scandal

This one was crazy. The Wells Fargo fake account scandal of 2016 involved one of the largest banks in the country creating millions of fake accounts without the consent of its customers. Through these fake accounts representatives racked up bonuses and the bank presented inflated numbers to the investing community.

This led to widespread outrage, as well as investigations and lawsuits against the bank. Wells Fargo has since agreed to pay billions of dollars in fines and settlements. You can read a detailed account of the Wells Fargo scandal at the Seven Pillars Institute.

The company forced/incentivized employees to create new accounts, so they did. They just pulled them out of their ass. Millions of accounts that nobody wanted, but some people at Wells Fargo made more money, I imagine all the way to the top. I’m sure new accounts created are an important metric for investors, and if that number keeps going… Yeah I mean you’re gonna buy the stock, right? So the stock goes up and the CEO and stockholders get paid, they sell because they know it’s BS.

And while there were fines aplenty, not one person went to jail, even though in theory there are all kinds of laws against financial corruption.

A story as old as time.


Enron was one of the biggest energy companies in the world before filing for bankruptcy in 2001 after it was revealed that the company had been engaging in accounting fraud. Top executives had been manipulating financial reports to make the company look more successful than it was. The Enron scandal resulted in the imprisonment of several top executives, including the company’s CEO, and left many employees and investors without their life savings. You can read more about the Enron fiasco at Applied Corporate Governance.

FIFA Bribery Scandal

In 2015, several top officials from FIFA, the international governing body of soccer, were indicted on charges of corruption. It was alleged that they had been accepting bribes in exchange for awarding lucrative contracts to certain companies. This led to the resignation of FIFA’s president, Sepp Blatter, and sparked a major “reform” effort within the organization. Vox has a solid write-up of the scandal.

The London Whale incident

The London Whale incident refers to a financial scandal that took place at JPMorgan Chase in 2012. The scandal involved the bank losing $6.2 billion as a result of risky and speculative bets made by one of its traders, nicknamed the “London Whale”.

The trades that led to the massive loss were made by Bruno Iksil, a French national who was working for JPMorgan Chase’s London office. Iksil made a series of complex financial bets that ultimately went against the bank. JPMorgan Chase was aware of the risks associated with Iksil’s trades, but they failed to properly monitor or control them. As a result, the bank lost billions of dollars. Read a JPMorgan whale post-mortem at

The Volkswagen Emissions Scandal.

The Volkswagen emissions scandal began in 2015 when it was revealed that the company had been installing software in its cars that allowed them to cheat on emissions tests. This led to the release of large amounts of pollutants into the atmosphere and led to a criminal investigation of Volkswagen. The company has since agreed to pay billions of dollars in fines and settlements. The BBC did a good job of explaining the scandal.

The Panama Papers Leaks

The 2016 Panama Papers involved the release of millions of confidential documents from the law firm Mossack Fonseca, which detailed the offshore financial dealings of many of the world’s richest and most powerful people in so-called “offshore accounts.” This led to investigations in dozens of countries and exposed widespread financial corruption and tax evasion. You can read more about the leaks at

The Paradise Papers Leaks

The Paradise Papers leaks were a similar financial scandal to the Panama Papers and involved the release of millions of confidential documents from the law firm Appleby. They detailed the offshore financial dealings of many large companies and wealthy individuals and led to investigations in several countries. The Guardian explains how the Paradise Papers leak reveals secrets of the world elite’s hidden wealth.

Toshiba Accounting Scandal

The Toshiba accounting scandal unfolded in Japan in 2015. It involved Toshiba, one of the largest electronics companies in the world, falsifying its financial statements to make it appear more profitable than it was. This led to the resignation of several top executives and resulted in Toshiba being delisted from the Tokyo Stock Exchange. Law firm and advocacy group Kessler Topaz Meltzer & Check, LLP did a good job of explaining the details.

The Olympus Corporation Financial Fraud

The Olympus Corporation financial fraud scandal originated in Japan and involved a cover-up of financial losses at Olympus Corporation. Six executives were ordered to pay more than half a billion dollars in damages. The scandal came to light in October 2011, when then-Olympus President Michael Woodford exposed the financial fraud that was taking place at the company. Woodford was subsequently fired, and Olympus Corporation was later fined $12 million by Japanese authorities.

The Petrobras Scandal

The Petrobras scandal is one of the largest financial corruption scandals in history. The Brazilian state-owned oil company, Petrobras, was at the center of a massive bribery and kickback scheme which involved top executives and politicians. Billions of dollars were siphoned off from the company through inflated contracts and kickbacks. It resulted in Petrobras agreeing to pay $853.2 Million to US and Brazilian authorities. The extent of the corruption was only revealed in 2014, but it is thought to have been going on for many years. This scandal has had a major impact on Brazilian politics and has led to the impeachment of President Dilma Rousseff. It also damaged the country’s economy and led to widespread public protests.


While financial corruption can take many different forms, these examples show that it can have a devastating impact on individuals, businesses, and even entire industries.

An AI Machine pulled these examples of financial corruption out of its ass… Imagine how much other shit is going on we have no idea about?

The Cost of Financial Corruption is High

It hurts economies, democracy, and the poor. A Discussion Paper on Corruption, Development and the Poor released by the United Nations Office on Drugs and Crime (UNODC) reveals that

“financial corruption costs countries around the world an estimated $2.6 trillion a year, equivalent to some 5% of global GDP.”

-United Nations Office on Drugs and Crime

Corruption is a major barrier to development. It undermines democracy and the rule of law, leads to human rights abuses, distorts markets, erodes the quality of life, and allows organized crime to flourish.

Causes of Financial Corruption

Financial corruption can have many causes, but some of the most common ones are incentives and a lack of financial transparency.

  • Incentives can come from many sources, such as a desire to get ahead of others in one’s field, a need to support extravagant lifestyles, or a feeling that financial gain is the only way to get ahead in life. Whatever the source of the incentive, financial corruption can have a major impact on economies, societies, and individuals. Incentives are one of the main reasons we only do things that make money.
  • Lack of financial transparency is another major cause of financial corruption. This can occur when companies or individuals do not disclose their financial information to the public, making it difficult to track where money is coming from and going. This lack of transparency can allow for financial corruption to go undetected and unchecked.

Both incentives and lack of financial transparency can lead to financial corruption on a large or small scale. Financial corruption can have serious consequences for economies, societies, and individuals, so it is important to be aware of the causes and ways to prevent it.

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Implications for Anti-Corruption Reforms

There are a few potential implications of financial corruption for anti-corruption reforms.

  • Financial corruption distorts incentives and creates inefficiencies in the economy. Corrupt officials are more likely to favor rent-seeking activities over productive ones, hampering economic growth.
  • Financial corruption undermines the legitimacy of the state and its institutions. When citizens perceive that the state is unable to effectively stop financial corruption, it leads to a loss of trust in the government and a decline in support for democracy.
  • Financial corruption can have negative impacts on social cohesion and stability. As financial corruption exacerbates inequalities within society it fuels social tensions and conflict. Inequality has led to popular protests around the world, including the Occupy Wall Street protest in the US and the Arab Spring revolutions.

In light of these implications, it is clear that financial corruption is a serious problem that needs to be addressed. However, this is not an easy task. Financial corruption is entrenched and complex, making it difficult to tackle. It often takes place through opaque financial and legal chicanery that regulators, journalists, and law enforcement can struggle to deal with.

Nonetheless, there are a few potential approaches that could be taken to address financial corruption.

How to Fight Financial Corruption

There are many ways to fight financial corruption, but the most important step is to acknowledge that it exists. Once we understand the root causes of financial corruption, we can start to develop solutions.

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Some of the key incentives that drive financial corruption include greed, power, and a lack of accountability. Some of the ways to combat these incentives are:

What do you think is the best way to fight financial corruption? Share your thoughts in the comments below.

The Conventional Anti-Corruption Approach

Governments have been “fighting” financial corruption for years, but the conventional approach has not been very successful. The main problem with the conventional approach is that it focuses on prosecuting corrupt individuals after the fact. This approach does not address the root causes of financial corruption, and it often fails to achieve meaningful results.

The conventional approach to fighting financial corruption is based on the following three pillars:

  • Prevention: The prevention pillar seeks to prevent financial corruption from happening in the first place. To do this, governments typically implement laws and regulations that establish standards of conduct for public officials.
  • Punishment: The punishment pillar focuses on punishing people who have already engaged in financial corruption. This is typically done through criminal prosecution.
  • Recovery: The recovery pillar seeks to recover the proceeds of financial corruption. This is usually done through asset forfeiture laws.

This sounds nice in theory but in reality the powerful employ teams of lawyers, accountants, public relations professionals, lobbyists,s and more to obfuscate attempts to hold them accountable.

Just look at the aftermath of the Great Financial Crisis or revelations of illegal stock trading by elected officials to see how little consequence those in power face.

“Today’s Department of Justice has lost the will and indeed the ability to go after the highest-ranking corporate wrongdoers.”

Jesse Eisinger The Chickenshit Club: Why the Justice Department Fails to Prosecute Executives

And the US is lucky in this area, we at least pretend to punish corruption. In many countries, government institutions are themselves corrupt. This means that the conventional approach is often not very effective in fighting financial corruption.

The Civil Society Approach to Fighting Corruption

In recent years, a new approach to fighting financial corruption has emerged. This approach is based on the idea that financial corruption can only be effectively combated if citizens are actively engaged in the fight. This approach is sometimes called the civil society approach. You can read more about the approach at Transparency International.

The civil society approach to fighting financial corruption has three main components:

  • Awareness raising: The first step in the civil society approach is to raise awareness of financial corruption and its effects on society. This can be done through education, media campaigns, and public events.
  • Advocacy: The second step in the civil society approach is to advocate for changes in the laws and regulations that govern financial corruption. This can be done through lobbying, litigation, and public pressure.
  • Accountability: The third step in the civil society approach is to hold government officials and institutions accountable for their actions. This can be done through monitoring, reporting, and investigating financial corruption.
  • Impact Consumerism: I’m going to add this here, that’s about holding corporations accountable for their bullshit. Learn more about why Impact Consumerism is the best way to hold corporations accountable.

The civil society approach is based on the idea that financial corruption can only be effectively combated if citizens are actively engaged in the fight. This approach has proven to be more effective than the conventional approach in many countries.

Focusing on Financial Incentives

There is a growing body of evidence that financial incentives can be effective in reducing corruption. If we align the incentives of business with those of society at large, we can make meaningful improvements.

Studies have found that financial incentives reduced corruption in the customs department of India by 50 percent. Similarly, another study found that financial incentives reduced corruption in Indonesian police stations by 30 percent. Exactly what that means is anyone’s guess, but it sounds good. These studies suggest that financial incentives may be an effective tool in the fight against financial corruption.

Do you have any experience with financial corruption?

I want to hear your story! Nothing is better than hearing it from the front lines so get in touch by sending a message to hey at lessbad dot org.

What do you think is the best way to fight financial corruption? Share your thoughts in the comments below!

Reform Begins with Thorough Analysis

There is a lot of talk these days about the role of corporations in society. Some people argue that corporations are evil and need to be regulated more tightly. Others argue that corporations are a force for good in the world and should be encouraged to do more social responsibility.

I believe that the truth lies somewhere between these two extremes. But what is vital is that we reform the global financial system.

  • The first step in reforming a corrupt system is to understand how and why it arose in the first place. This can be done through a process of analysis and research. Only after we have a thorough understanding of the problem can we begin to develop solutions.
  • The second step is to develop policies and procedures that will prevent corruption from happening in the future. These policies and procedures must be designed to change the incentives that currently exist for financial corruption.
  • The third step is to implement these policies and procedures in a way that is effective and efficient. This can be done through education, training, and innovative technology.
  • Finally, we must monitor the progress of our efforts to ensure that financial corruption is truly being reduced.

Financial corruption is a serious problem that needs to be addressed. We must take action to prevent it from happening in the future.

What are your thoughts on financial corruption? Share your thoughts in the comments below!

Thinking and Working Politically

Financial corruption and thinking and working politically are two strategies people use to get ahead in life. “Thinking and working politically” is a term used to describe the strategies that people use to get ahead in life. This includes thinking about the ways that power and resources are distributed, and how to get access to them. It also includes working with others to create change.

Thinking and working politically is a good way to prevent financial corruption because it helps people understand how power and resources are distributed.

Anti-Corruption Laws and Regulations

Financial anti-corruption laws and regulations can include:

  • Requirements for financial disclosure.
  • Rules about how government contracts are awarded
  • Prohibitions on financial transactions with certain individuals or entities

Financial anti-corruption laws and regulations are important because they help to ensure that government funds are used for their intended purpose. They help ensure public officials are not unduly influenced by private financial interests.

Methods of Financial Exploitation

There are many different ways in which financial exploitation can occur. Sometimes, financial exploitation is very subtle, and the victim may not even realize that they are being taken advantage of. Other times, financial exploitation can be blatant and obvious. Regardless of the method used, financial exploitation is a form of abuse that should not be tolerated.

Some common methods of financial exploitation include:

Stealing or misusing someone’s financial resources

One of the most serious financial crimes is stealing or misusing someone’s financial resources. This can involve taking money or property illegally or using someone’s financial information without their permission. Stealing or misusing financial resources can have a major impact on the victim, who may lose money, property, or even their job. Financial crimes can also have a ripple effect on the economy, as businesses and individuals lose confidence in the financial system.

Manipulating financial information

Financial manipulation is a technique used to distort financial information for personal gain. This can include inflating or deflating financial data, hiding financial losses, or falsifying financial documents. Financial manipulation can be very difficult to detect, and can often go undetected for long periods.

One of the most common forms of financial manipulation is known as “cooking the books.” This involves altering financial records to make it appear that a company is performing better than it is. This can be done by inflating revenue figures, understating expenses, or otherwise manipulating financial data. Cooked books can be used to mislead investors, regulators, and other financial stakeholders.

A company may inflate its financial reports to receive a larger loan from a bank or to attract more investors. Financial manipulation can also be used to hide financial problems or fraud. In some cases, financial misrepresentation is simply the result of incompetence or unnecessary complexity.

Forcing someone to sign financial documents they don’t understand

One particularly harmful financial crime is forcing someone to sign financial documents they don’t understand. This can involve tricking someone into signing a document they don’t understand or pressuring them into signing something they’re not comfortable with.

This reminds me of all the legal terms and services we just have to click to agree to when we browse the internet.

Refusing to let someone have financial independence

When someone is not allowed to be financially independent, they rely on others for financial support. This can create an unfair power dynamic, where the person with financial independence has a lot of control over the other person.

I’d argue that the big bank’s historic resistance to reaching out to the inner city and avoiding the poor is a form of preventing people from being able to take care of themselves financially. “The unbanked” is a serious problem.

The US Census Bureau found that in 2019,

“7.1 million households in the United States (5.4%) were unbanked and lacked a checking or savings account.”

Even though this represents significant potential profit for banks that can reach these underserved communities, banks couldn’t be bothered.

Making financial promises that can’t be kept

When it comes to financial matters, honesty is always the best policy. Unfortunately, not everyone adheres to this principle, as evidenced by the many cases of financial corruption. This occurs when someone makes financial promises that they can’t keep, usually to gain an advantage financially.

Refusing to give someone access to their own money

When someone is denied access to their own money, it can lead to financial exploitation. This can happen when someone is refused the ability to withdraw or transfer their own money, even if they have the legal right to do so. The FDIC was created to insure depositors’ money and avoid bank runs, but the issues still occur. In 2022 there was a run on cryptocurrency brokerage FTX that led the crypto-currency token to lose more than 80 percent of its value, essentially evaporating millions of dollars into the ether.

Using someone else’s money without their permission

Speaking of FTX, one of the biggest contributors to corruption in the financial world comes down to people using other people’s money in risky ways without the investor’s knowledge.

Making financial decisions on behalf of someone else without their consent can be a tricky situation. On the one hand, you may feel like you are doing what is best for the person you are representing; on the other hand, you may be worried about making the wrong decision and hurting them financially.

Sabotaging someone’s financial plans or projects

Sabotaging someone’s financial plans or projects can involve a variety of tactics, from spreading malicious rumors to deliberately ruining someone’s credit score. Whatever the means, financial sabotage is a way to harm someone’s financial stability and potentially ruin their life.

Withholding financial support or resources

This can be done in several ways, such as refusing to give someone the money they need to live, or preventing them from accessing financial resources such as bank accounts or credit cards. This can be an extremely effective way to control someone, as it can leave them feeling completely helpless and dependent on their abuser. Financial exploitation is a very common form of abuse, and it can be extremely difficult to break free from. If you are in a situation where you are being financially exploited, it is important to reach out for help.

These are only a few examples of how financial exploitation can take place. Financial abuse can have a devastating impact on the victim’s life. It can cause financial ruin, and it can also lead to emotional and psychological distress. In some cases, financial exploitation can even be deadly.

What a Less Corrupt World Looks Like

Fixing the corruption endemic to the financial system is not going to happen overnight. A lot has to change. But if we can bring more transparency and accountability to the financial system, it would go a long way toward solving so many of our social problems. With less corruption, we can achieve all kinds of societal goals to make life better for everyone.

Goals of a less corrupt world like:

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Competent Leaders

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