When the enron scandal broke two years ago, optimists argued that we were dealing with only "a few bad apples." Instead, it turns out, Enron was an example of the Cockroach Theory: if you see one cockroach, a whole nest is undoubtedly lurking nearby. We were absolutely overrun by those little financial buggers last week. Just as we started trying to stamp out old scandals―the trials of former Credit Suisse First Boston star investment banker Frank Quattrone and former Tyco chairman Dennis Kozlowski got underway―a whole new bunch of roaches sprang out of the wall. A former top hedge-fond trader, Steven Markovitz, copped a plea to making improper "market timing" trades with mutual funds; Alliance Capital became the fifth fond manager to admit allowing such trades; Prudential Securities (now Wachovia) and Merrill Lynch canned employees for improper fond trading, and JPMor-gan Chase paid $25 million to settle charges it violated rules covering initial public offerings of stock. A scandal score-card in Friday's Wall Street Journal listed 16 cases. Send out for more bug spray.
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