Sanders rips Wall St. ‘greed,’ calls ‘fraud’ its business model

Democratic presidential candidate Bernie Sanders expressed a complete lack of confidence in the financial industry when he ripped Wall Street in a speech outlining reforms that included breaking up big banks, throwing financial executives in jail and imposing a tax on “speculators.”

“Greed, fraud, dishonesty and arrogance — these are the words that best describe the reality of Wall Street today,” Mr. Sanders, a socialist Vermont senator, said at an event in New York on Tuesday. “Greed is not good. In fact, the greed of Wall Street and corporate America is destroying the fabric of our nation.”

Even Wall Street critics will sometimes soften their attacks by saying not all financial firms are trying to rip off the public. But Mr. Sanders gave no quarter.

“The reality is that fraud is the business model on Wall Street,” Mr. Sanders said. “It is not the exception to the rule; it is the rule. And in a weak regulatory climate, the likelihood is that Wall Street gets away with a lot more illegal behavior than we know of.”

Within the first year of his administration, Mr. Sanders said he would begin to break up commercial banks, “shadow banks” and insurance companies who are so big their collapse would pose a catastrophic risk to the U.S. economy.

He vowed to throw in jail financial firm leaders who had a role in the 2008 financial crisis.

“Not one major Wall Street executive has been prosecuted for causing the near collapse of our entire economy,” Mr. Sanders said. “Under my administration, Wall Street CEOs will no longer receive a get-out-of-jail-free card. Big banks will not be too big to fail. Big bankers will not be too big to jail.”

In addition, Mr. Sanders would impose “a tax on Wall Street speculators” and use the revenue to offer free tuition to U.S. colleges and universities.

Mr. Sanders asserted that the leading contender for the Democratic presidential nomination, former Secretary of State Hillary Clinton, would be too soft on Wall Street if she were president.

On Monday, Ms. Clinton’s campaign touted her Wall Street reform plan and fired a preemptive strike at Mr. Sanders, saying he’s not tough enough on hedge funds, investment banks and insurance companies.

(More: What a Hillary Clinton presidency would mean for financial advisers)

“Unfortunately, Senator Sanders has so far taken a hands-off approach to some of the riskiest institutions and activities in our economy, which were among the biggest culprits of the 2008 crisis,” Gary Gensler, former Commodity Futures Trading Commission chairman and the chief financial officer for the Clinton campaign, said in a statement.

In advance of the first nomination contest, the Iowa caucus, on Feb. 1, candidates are releasing policy plans in a number of areas. On Monday, Republican presidential hopeful Ben Carson outlined an economic proposal that centers on a 14.9% flat tax.