This dissertation explored why the collateralized debt obligations (CDOs) and how to restore investor confidence in the CDO market in the United States of America. Based on the findings of the in-depth interviews held for 20 financial professionals with CDO knowledge in the United States, many recommendations can be derived from CDOs. Investors in shopping around for the best prices of investments, CDOs, should consider some of the basic principles of investment such as do not buy any risky securities that are complex. Alexander-Andrew (2007) supported that investors who lack accurate information about a particular security might suffer investment losses (unanticipated loss), particularly if markets are unfavorable. Investors' should always insist for transparency of financial reports and discuss with banks if there are any hidden information that may be misleading. Investors should demand that credit rating agencies sloppy work should be accountable for any losses suffered from securities purchased based on their grades. Leadership begins with ethics because leaders are responsible for establishing the moral foundation within the organization. In the future, leaders of financial institutions marketing collateralized debt obligations (CDOs) and collateralized loan obligations (CLOs) should consider making more covenants, simpler cash flow structures and less debt.
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