Honest Pecora was a hard working immigrant from Sicily. At the time of the Wall Street crash of 1929 he was an ADA in New york City. He became famous as Chief counsel to the United States Senate Committee on Banking and Currency.
Pecora was the 4th chief counsel to the committee after the first two were fired for incompetence and the third quit. He would go on to examine several of the nations influential bankers and stockbrokers.
On March 4, 1932 the senate committee began hearings to root out the underlying causes of The Great Depression. The investigation was subsequently named The Pecora Commission. Today the findings of the commission are more relevant than ever as the causes of The Great depression and the current financial crisis are the same.
According to Pecora “Bitterly hostile was Wall Street to the enactment of the regulatory legislation. Had there been full disclosure of what was being done in furtherance of these schemes, they could not long have survived the fierce light of publicity and criticism. Legal chicanery and pitch darkness were the banker’s stoutest allies.”
On February 19th, 1933 the New York Times released an article called Pecora Denounces Stock Manipulations. In the article Pecora Stated “men of might – not because of principle but because of economic power and wealth – have by the waving of a hand and adoption of a resolution taken millions and millions of the hard-earned pennies of the people and turned them into gold for themselves.”
Later that year Pecora addressed the Federal Bar Association. He was adamant about enforcing financial regulations stating “Unless we adopt new rules and enforce them, we shall not have learned our lesson that the depression of the last years have taught us. When we return to prosperity – and we have – unless we also have these rules and enforce them, prosperity will do no one any good.”
After the Pecora commission new rules were enacted and enforced for a time. The commission led to the Glass–Steagall Banking Act of 1933, the the Securities Act of 1933, and the Securities Exchange Act of 1934 which led to the formation of the Securities and Exchange Commission aka the SEC.
Unfortunately Wall Street has been dramatically deregulated over the last 30 years. As a result the exact same conditions that caused The Depression exist today. It would seem that we all forgot about The Great Depression and the lessons it taught us.
More recently we have had the Financial Crisis Inquiry Commission, which was appointed to investigate the current financial crisis. They found that the current crisis was avoidable. Phil Angelides the chairman of the commission went on to say “The crisis was the result of human action and inaction. It could happen again if we do not learn from history. In many respects, our financial system is unchanged from the eve of this crisis. We believe that much more needs to be done.”