Is Wall Street Evolving into an Illegal Monopoly?


Sixty-five years ago, the Justice Department filed an antitrust suit against 17 investment banks seeking to break them up for creating “an integrated, overall conspiracy and combination ‘ to eliminate competition and monopolize” the investment banking business. It failed. Today, the investment banking business is much larger and more profitable, and much more concentrated than it was back then. Only 6 Wall Street firms monopolize the even richer investment banking business today, according to William D. Cohan’s Bloomberg article (“Cohan: How Wall Street Turned a Crisis Into a Cartel”).

Today’s Big-6 are Goldman Sachs, Morgan Stanley, JPMorgan Chase, Citigroup, Bank of America, and Deutsche Bank. They still operate like a cartel, according to Cohan: “Today, while there is no inkling of an antitrust lawsuit against Wall Street, its cartel-like behavior is very much in evidence. The remaining banks have increased their hold over the marketplace and continue to collude when it comes to pricing their services.”

As the title suggests, the post-crisis banking consolidation has resulted in an even stronger cartel. “The renewed power of the Wall Street cartel may be the worst consequence of the 2008 decision to rescue Wall Street rather than let it collapse under the weight of its broken business model,” writes Cohan. Banks are struggling today, but when the economy picks up, “the iron grip of the remaining Wall Street powerhouses will be readily apparent.”

Cohan, who is a former investment banker himself, wrote the piece to call on the Obama administration to “break up the Wall Street cartel and re-establish the integrity of the capital markets.”

Page Perry is an Atlanta-based law firm with over 150 years collective experience protecting investor rights and fighting Wall Street greed.