William K. Black

William Kurt Black (born September 6, 1951) is an American lawyer, academic, author, and a former bank regulator.[1] Black's expertise is in white-collar crime, public finance, regulation, and other topics in law and economics. He developed the concept of "control fraud", in which a business or national executive uses the entity he or she controls as a "weapon" to commit fraud.[2]

Background

Black earned a J.D. from the University of Michigan Law School and a Ph.D. from the University of California, Irvine. Black is currently an associate professor of Economics and Law at the University of Missouri-Kansas City in the Department of Economics and the School of Law. He was the executive director of the Institute for Fraud Prevention from 2005 to 2007 and previously taught at the LBJ School of Public Affairs at the University of Texas, and at Santa Clara University.[3]

Black was litigation director for the

2008 financial crisis

Bill Moyers Journal appearances

On April 3, 2009, Black appeared on Bill Moyers Journal on PBS and provided critical commentary on the 2008 financial crisis. Black asserted that the 2008 financial crisis was essentially caused by a big Ponzi scheme; that the "liar loans" and other financial tricks were essentially illegal frauds; and that the triple-A ratings given to these loans was part of a criminal cover-up. He said that the "Prompt Corrective Action Law" passed after the Savings and loan crisis mandated that ailing banks should be put into receivership. Black also stated that trying to hide how bad the situation is will simply prolong the problem, as happened in Japan and resulted in Japan's lost decade. Black stated that Timothy Geithner was engaged in a cover-up, and that the administration did not want people to understand what went wrong or how bad the banking situation was.[6] On April 23, 2010, Black was again interviewed by Moyers to update the public's understanding of the 2008 financial crisis.[7]

Testimony before Congress on the bankruptcy of Lehman Brothers

On April 20, 2010, Black testified before the House Financial Services Committee in a hearing titled "Public Policy Issues Raised by the Report of the Lehman Bankruptcy Examiner."[8] He testified about the role that Alt-A mortgages, what he called "liars' loans," on residential real estate played in the downfall of Lehman Brothers. His testimony was that "Lehman's failure is a story in large part of fraud. And it is fraud that begins at the absolute latest in 2001, and that is with their subprime and liars' loan operations."[9] As explained in his prepared statement, his reference was to Aurora Loan Services, Inc., which was a subsidiary of Lehman: "Lehman's principal source of (fictional) income and real losses was making (and selling) what the trade accurately called 'liar's loans' through its subsidiary, Aurora. (The bland euphemism for liar's loans was 'Alt-A.') Liar's loans are 'criminogenic' (they create epidemics of mortgage fraud) because they create strong incentives to provide false information on loan applications."[10]

On the same page in his prepared testimony Black referenced an article from the Denver Post dated September 16, 2008, the day after Lehman filed for bankruptcy. The article reported on the uncertain fate of Aurora Loan Services, which was based nearby, and quoted Lehman's chief financial officer as saying the previous week that, "The majority of our write-downs were in Alt-A driven by an increase in.. . delinquencies and loss expectations." The article also said that Lehman was "among the first of its peers to originate home loans and securitize them for sale across the globe, and it fueled the growth of the Alt-A loan."[11]

Testimony before Irish Banking Inquiry

Black was invited to testify before the Irish parliament's banking inquiry in February 2015. In his testimony, he described the broad September 2008 Irish bank guarantee as "the most destructive own goal in history".[12]

birth name	William Kurt Black
birth date	September 6, 1951
birth place	Dearborn, Michigan, U.S.
alma mater	University of Michigan, Ann Arbor University of California, Irvine

Background

Savings and loan scandal

2008 financial crisis

Bill Moyers Journal appearances

Testimony before Congress on the bankruptcy of Lehman Brothers

Testimony before Irish Banking Inquiry

Works

External links

References