Former SEC Head -- Wall Street Executives Were Clueless About Subprime Losses

The top executives of Citigroup, Merrill Lynch and Bear Stearns had no idea what their firms stood to lose from the subprime crisis, as a result of poor business practices and a lack of transparent financial data.

At least, that’s the take of former Securities and Exchange Commission chairman Harvey Pitt.“As the crisis was starting, the CEOs would get up and say, ‘I lost $4 billion.’ Later they would say, ‘The figure is $7 billion,’ and months after that they’d say, ‘It’s $11 billion,’’’ Mr. Pitt said at a U.S. Chamber of Commerce conference in Washington. “There’s only one concrete conclusion you can draw: They did not know what they were talking about.”