Wells Fargo's corporate headquarters in San Francisco, California

Patrick Rodgers is taking his frustration all the way to the bank – literally. When he was fed up with Wells Fargo's lack of answers, he sued them. When they still paid him no heed, he foreclosed on the company's local office.A feud between a homeowner and his mortgage company ends with an order to seize property – but it's not in the order you might expect.

Rodgers owns a svelte Victorian house in West Philadelphia, which he bought for a paltry $180,000, thanks to the downtrodden housing market. But his mortgage lender Wells Fargo demanded that he purchase a $1 million insurance policy, which they say is the full replacement value of the home. Notice a discrepancy in those numbers? So did Rodgers, who thought the extreme insurance policy was shaking him dry.

He wrote a few simple (yet formal) letters to Wells Fargo to ask about the insane insurance rates he was being forced to pay. When they didn't take his questions, he took them to court, winning a $1,173 settlement against their failure to respond, under the Real Estate Settlement Procedures Act, which mandates mortgage companies to respond to letters within 20 days.

When Wells Fargo didn't pay – and this might sound familiar – Rodgers started foreclosure proceedings against their local office. Using a sheriff's levy, he was entitled to seize their property to collect his judgment.

In the end, Wells Fargo didn't default on their payment – they paid Rodgers in full – but he claims he still hasn't received an answer to his original letters. While the sheriff's sale might not get past the initial stages, at least Rodgers is getting a little payback against the mortgage world.

Call it over-the-shoulder data theft. It happened to Donald Malloy on a recent business trip to Las Vegas.

Malloy, business development manager for NagraID Security, used his American Express card to buy some water and snacks at a Las Vegas convenience outlet. The next day he got a phone call from AmEx advising him that someone used his card to make a fraudulent $900 purchase at an online consumer electronics store.

AmEx absolved Malloy of responsibility and issued him another account number. He figures the person behind him in line at the convenience store snapped a camera phone photo of his AmEx card while he was paying for his snacks.

"I thought they were texting," says Malloy. "They probably e-mailed it to some back-end shop who knows where and they started making purchases with that card."

It's another example of how readily free Web services and new mobile devices are being adapted to criminal pursuits.

MasterCard and anti-virus giant Symantec this week announced a partnership to introduce payment cards that use NagraID technology to issue a unique six-digit passcode. The code magically appears in a sliver of a window in the upper-right corner of the payment card. The card holder must enter the passcode to authorize any online transactions using the card.

The technology has been available for several years, but is only now catching on. Banks in Poland, Turkey and Taiwan are running pilot programs, using cards that look and feel like any ordinary payment card. MasterCard and Symantec have begun trying to persuade banks in North America to offer such cards to their patrons.

Whether U.S. banks are receptive remains to be seen. "In the past couple years, with the recession, the banking world has not been willing to invest in any new technologies, but that's changing now," says Malloy. "As fraud grows, banks are realizing that they need to come forward and adopt something that's going to help them in the future."

But are U.S. consumers ready to give up convenience and take the extra step to call up and use a unique passcode for every online purchase?

"Some consumers will balk," says Malloy. "I think as banks more and more will want to offer this to their customers to show the extra level of protection. They are actually doing something for their customers and leading the way."

Via:Lifehacker

Debit cards come with more risk than most payment methods, but we tend to use them because they're convenient. While they can be handy, they can also cause you a lot of trouble. Here's how to stay safe.

In general, credit cards are safest. If you have a credit card or charge card (read anexplanation of the difference here), you're better off using that for the majority—if not all—of your purchases. Credit and charge cards tend to come with better rewards and you don't have to worry about fees for exceeding your limit. They better protect your money because you aren't technically paying with your money until you've seen the charge, whereas your money is instantly removed when using a debit card. All of that said, there are many reasons why you might need or want to use a debit card. If you don't need to use your debit card, don't. If you have a good reason for using it, read on. We're going to talk a look at the rights you have and the risks you take as a debit card owner, as well as what you can do to stay safe and avoid fees from your bank and general fraud.

Know Your Changing Debit Card Rights

The Few Varying Rights You Have

You get very few rights, by default, when it comes to debit cards. Most of the "rights" you have come in the form of incentives from your bank. Banks will often offer fraud protection packages with their accounts and cards, so be sure to call your bank and find out what rights they're offering for your specific type of account. Generally these rights are pretty decent with major banks. What you need to be more concerned with are the ways they'll charge you fees for minor mistakes on your part. Overdraft feeds are now much more limited, cutting out a huge source of revenue for banks. Additionally, interchange rates are now being capped as of July 1st, 2011, meaning banks can only make so much money in merchant feeds every time you swipe your card. The more restrictions imposed on the banks means the more creative ways they need to find to start charging fees. While nothing is in place just yet, the Wall Street Journal points out that the following fees are likely to show up this year:

• An annual fee of about $25 for debit card use
• Higher withdrawal fees at ATM machines for non-customers
• Limitations on the number of transactions you can make with your debit card, and potentially the amount as well.

Banks may also do away with debit card rewards programs, so you may want to consider cashing in your rewards points sooner than later. Bank of America, for example, is already testing some of these out by offering anEssentials checking account that comes with a debit card fee. Once account, calledeBanking is already in place. If you get an eBanking account you get everything fee-free unless you see a teller. If you see a banking teller, you get hit with a fee. As a current Bank of America customer, I've noticed they're trying to keep me away from the teller window already and I have a regular (and hopefully grandfathered) checking account. If there's something I can do at the ATM but go to the teller because I have a question, I have, on multiple occasions, been walked over to the ATM machine and watched as I used it. This is just a taste of what's to come. As soon as next month, many banks are imposing new fees and restrictions on both your accounts and debit cards. Call your bank for more information, read any mail they send you, and be prepared to alter the way you use your debit card and bank account to avoid getting hit with surprise charges.

Overdraft Fees: When They're Allowed and How to Prevent Them

Debit cards are not credit cards, even though they operate in very similar ways, but sometimes it can be easy to see them as interchangeable tools. A debit card is really just a quicker means of writing a check. When you write a check, the funds are withdrawn from your account as soon as the check is cashed. The same goes for a debit card, only this happens much faster and is sometimes instantaneous. Anyone who's used a debit card is probably well aware of this, but it's not necessarily what we're aware of when we're actually using the card. It's so important to remember that using a debit card means your money is now gone. There isn't much wiggle room for error. If you pump too much gas and you cause an overdraft of your account—which is still a legal overdraft because of how gas stations charge your card—you're stuck with it. Even with new consumer protection laws preventing banks from allowing us to charge more on our debit cards than our balance can cover, there are still many ways overdrafts can happen.

Going back to the example of purchasing gas for your car, let's break down how this charge works and why you can receive an overdraft. If you pay at the pump, your card is initially charged $1 to ensure it will be approved after you finish pumping gas. This is because the gas station doesn't know the size of your tank, how much gas you're going to put in it, and, therefore, what the total cost of gas will be. Say you want to put $30 of gas in your car because that's all you've got in your bank account and you accidentally go over. Your account will overdraft because your bank has guaranteed the charge to the gas station, just like it would with a check. Because the amount is unknown, those overdrafts are still allowed. Your bank can't deny an amount it's unaware of, but it can honor the charge and assess a fee if you can't cover it. Any situation like this, where the final amount is unknown, will still cause overdrafts. There is nothing protecting you, and so you need to protect yourself. The easiest way is to simply pay up front so the charge will be denied if you can't cover it and so you won't be able to go over the pre-paid amount even if you try. While in an ideal situation you'd keep enough money in your account to avoid overdrafts entirely, you can always forget and always make a mistake so it's best to be careful in this situation.

Another common way of over-drafting your account is when certain kinds of other charges don't show up immediately and you forget about them. Let's say you do not have a credit card that you can use to pay your bills and you only have your checking account and the debit card associated with that account. If you pay your bills using automatic withdrawal (ACH electronic funds transfer), these charges are notprotected from overdrafts. Whenever you can, pay your bills with your debit card instead of using automatic withdrawal. This will shift your worst-case scenario from ending up with overdraft charges to simply failing to pay your bill on time. Generally, if a bill is not paid on time, the late fee is considerably less than the overdraft fee and you may not even have to pay that late fee if you can manage to pay your bill within the next few days. You want to avoid automatic withdrawal whenever possible for this reason. Try to reserve wire transfers for money going into your account (e.g., direct deposit for your paycheck).

How to Lower Your Chances of Debit Card Fraud

Avoiding Fraud

There are many ways you can become a victim of debit card fraud, but it's a lot easier online. While it helps to be aware of common scams, you can't be on top of everything at all times. Despite your best efforts, being a victim of fraud is still a possibility. If you can't use a credit card in place of your debit card when shopping online, check with your bank to see if disposable/virtual credit cards are available to you. If you're not familiar, these are basically single-use numbers, often with set limits, that expire after use. While these virtual, disposable numbers may work the same as your debit card and withdraw money immediately, you don't have to worry about someone else finding that number, using it, and draining your bank account.

When you're out making purchases in the real world, there are still a number of risks. For example, many businesses—particularly restaurants—still print credit and debit card receipts with your entire number on them. This is particularly bad because your number is exposed to anyone who sees that receipt. Check your receipts when you make purchases to ensure the full number is not included. If it is, use the pen you're signing with to black out all but the first or last four numbers of your card.

In the event your card is lost or stolen, you need to be prepared to handle the situation as quickly as possible (we'll discuss why shortly). Be prepared to call your bank and the credit processor (VISA, Mastercard, AMEX, Discover, etc.). It's best if you compile the necessary information, such as numbers you'll need to call and information you'll need to provide. Once you do, print it out and keep it somewhere handy or save it in an application like Evernote or Simplenote so you have it easily available on your smartphone or computer. If you're still using a regular cellphone, most have a notes feature where you can store small amounts of text, so it may help to keep the information there as well. If not, you can always store important numbers in your phone's address book, assigning the business name as the first name and something like CARDFRAUD for the surname. This will keep the numbers together and easily accessible in case of a problem. Generally the numbers you'll need will be on the back of your card, but to help you out here are guides for VISA, MasterCard, and American Express.

Fraud Protection Dissolves with Time

If a fraudulent charge of any kind may have been made to your debit card, you're generally pretty well protected. While banks only have to cover resulting damages past $500 on your credit card, many offer better protection ($50, and sometimes less) as an incentive. Be sure to check with your bank to know how protected you really are in the event someone steals and uses your debit card. If debit card fraud could cost you quite a bit, it may be time to find a new bank.

Even if you are well-protected by your bank, they'll only help you out for so long. Good protection may be contingent on your reporting possible fraud within 48 hours, and your bank is not required to help you at all 60 days after receiving your monthly statement. Again, be sure to call and find out your bank's specific policies, but the important takeaway is this: check the charges on your account regularly and call your bank if something is unfamiliar. It may not be fraud and it may just be a charge you'd forgotten about, but you're protecting yourself simply by calling to ask about it. Often times your bank can help you get more information on the charge and figure out what it is. You're better safe than sorry in this situation, since all you're doing is spending a few extra minutes on the phone. If waiting on hold sounds horribly tedious, consider using a tool like LucyPhone to avoid waiting on hold altogether.

Even if it isn't necessarily fraud, it's always worth double-checking your statement because sometimes you can get overcharged by small amounts. Sometimes tips on restaurant bills get misread (or intentionally increased), companies accidentally process certain transactions twice, or the cashier forgot to close out the previous transaction and it got added to your bill by accident. You should get into the habit of checking your statements regularly to help avoid these more common issues as well.

All this information points to one thing: increased awareness. Pretty much every debit card problem you could encounter can be prevented by simply staying aware of how you're using your card, the restrictions imposed on your card, and what fun new things your bank is dreaming up. Stay informed and aware and you'll be able to avoid getting screwed.

Bernie Madoff, who is scheduled to be sentenced June 29 for perpetrating history's biggest Ponzi scheme, is just be the latest in a long line of industry titans turned crooks

Bernard Madoff

Bernard L. Madoff Investment Securities LLC

Pleaded guilty: March 12, 2009 to 11 charges of fraud

Next to Bernie Madoff, the rest of the sticky-fingered CEOs on this list seem like dime-store shoplifters. Madoff's decades-long, $65 billion Ponzi scheme, which came to a screeching halt with his Dec. 11, 2008 arrest and earned him 150 years in prison, is perhaps history's biggest financial swindle, and his trademark thin-lipped smile became the defining image of the avarice that last fall nearly brought the global financial system to its knees. What made his deception doubly painful was Madoff's sterling reputation—for years, he was regarded a pillar of the investment community, a taciturn superstar whose clockwork returns had clients nearly breaking down his door. From the 17th floor of the Lipstick Building in Manhattan, the 70-year-old money manager bilked thousands of investors, picking the deep pockets of his country-club counterparts, bankrupting charitable foundations, ransacking tycoons and celebrities alike. When he pleaded guilty in March to federal charges that carry up to 150 years in prison, millions cheered his comeuppance. What we've yet to come to terms with, however, is the way in which his unalloyed greed exposed our own.

Kenneth Lay & Jeffrey Skilling

CEOs: Enron

Convicted: May 25, 2006 of fraud and conspiracy

Enron imploded with breathtaking speed in the early 2000s, going virtually overnight from being the nation's seventh-largest company to a bankrupt shell synonymous with corporate greed and deceit. Kenneth Lay and Jeffrey Skilling were at the helm as the company collapsed, taking the jobs and savings of thousands along with it. Lay helped create Enron in 1985 as a natural gas provider and presided as it grew into an energy-trading behemoth worth some $68 billion in 2000. Skilling joined in 1990 and, as he rose, pushed an aggressive growth strategy that, in retrospect, relied on shady accounting to reflect chimerical profits. In 2001, Skilling briefly became the company's CEO while Lay moved to chairman; Skilling abruptly resigned months later as the energy giant neared the breaking point, later cashing out nearly $60 million in stock. The company filed for Chapter 11 on December 2, 2001 — at that point the largest bankruptcy in U.S. history.

Skilling and Lay were tried together and convicted in May 2006 on fraud and conspiracy charges. Lay died of heart disease two months later while awaiting a prison sentence that could have lasted 45 years. Skilling was fined $45 million and is currently serving a 24-year sentence in federal prison. He has appealed his conviction.

 

 

Dennis Kozlowski

CEO: Tyco International Ltd.

Convicted: 06/17/2005 of misappropriation of corporate funds

In a 60 Minutes interview defending his innocence, former Tyco CEO Dennis Kozlowski maintained that "nothing was hidden." That's for sure. Innocent or guilty, Kozlowski clearly wasn't modest, living a life of opulent luxury. The question of the case wasn't whether he took the money (he did), but rather whether he was authorized to do so — an issue he considered a jury unfit to rule on. "I was a guy sitting in a courtroom making $100 million a year and I think a juror sitting there just would have to say, 'All that money? He must have done something wrong.'"

There's no denying Kozlowski led a lavish lifestyle. His $30 million New York City apartment was allegedly paid for by the company. (The shower curtains alone, it was revealed in court, cost $6,000.) Tyco also footed half of the $2 million bill for an extravagant birthday party for Kozlowski's second wife in 2001. Disguised as a shareholder meeting, it took place on an Italian island and featured an ice sculpture of the Statue of David urinating Stolichnaya vodka. The bash—which became known as the Tyco Roman Orgy—probably didn't help his case. Kozlowski is currently serving up to 25 years in prison.

 

 

John Rigas

CEO: Adelphia Communications Corporation

Convicted: 07/08/2004 of bank, wire and securities fraud.

John Rigas' story is an increasingly common version of the typical American dream: from rags to riches to Federal court. Born in a rural New York town to Greek immigrant parents, Rigas was busing tables by the age of nine, joined the Army during World War II and earned a bachelor degree in management engineering, working nights at his family's small movie theater. Starting with a stake in a small cable TV franchise, the Rigas family built the Adelphia Communications Corporation, the fifth largest cable provider in the country, with 5.6 million customers in 30 states. But he was forced to retire as CEO in 2002 after being indicted for securities, bank and wire fraud; prosecutors charged him with the personal misuse of corporate funds and with hiding $2.3 billion in liabilities from investors. Rigas was convicted and sentenced to 15 years in prison; Adelphia filed for bankruptcy after admitting that the former CEO and his two sons had failed to record $3.1 billion in loans. Rigas, who petitioned for a Presidential pardon in January 2009 and was rejected, will be 92 years old when his sentence runs out in 2017.

 

 

Joe Nacchio

CEO: Qwest International

Convicted: 4/19/2007 of insider trading. Appeal pending.

In the wake of a multibillion-dollar accounting scandal that nearly destroyed the Denver-based telecommunications company, former Qwest CEO Joe Nacchio was convicted in April 2007 on 19 counts of insider trading. Prosecutors said he illegally sold $52 million in stock in 2001, even as he knew the company was taking on water. Nacchio was sentenced to 6 years in prison but remained free on $2 million bail pending an appeal.

In 2008, a U.S. appeals court overturned Nacchio's conviction, saying a key expert witness had been wrongfully barred from testifying. But the ruling was hardly a vote of confidence in the disgraced executive: the judges also concluded there was sufficient evidence to convict him. This February the guilty verdict was reinstated, and Nacchio was ordered him to serve out the remainder of his term. In a last-ditch effort to stay out of the slammer, Nacchio asked a federal judge in March to reconsider his request to remain free on bail while he appealed to the Supreme Court for a new trial. No such luck: in April he was ordered to report to prison. Nacchio is now sharing a cell at a minimum-security Federal prison camp at Minersville, Pa. His Supreme Court appeal is still pending.

 

 

James McDermott Jr.

Canadian pornographic film actress Kathryn Gannon, known as "Marilyn Star," is accused of illegally profiting from inside information gained from an intimate relationship with James McDermott Jr., former chief executive at an investment bank.

CEO: Keefe, Bruyette & Woods

Convicted: April 27, 2000 of insider trading

Once upon a time, James McDermott earned $4 million a year as chairman and CEO of the Wall Street investment bank KBW, making regular appearing on CNBC and CNN to showcase his financial prowess. Until, that is, he brought his business expertise into the bedroom. In December 1999, McDermott, a married father of two, was arrested for leaking secrets about five pending bank mergers to his mistress. The "McDermott mess" took a turn for the tabloids when it was discovered that his mistress, Kathryn B. Gannon, had some secrets of her own — she was an X-rated film star with another lover on the sly who, along with Gannon, had made an estimated $80,000 off of McDermott's tips.

McDermott's lawyers blamed his lapse in judgment on alcohol, depression and family problems. "During this trial I was called a stud stock-picker and a master of the universe," he told the court. "Those things could not be further from the truth. I'm just an average person who's tried to work hard and to give back." In the end, U.S. District Judge Kimba Wood reduced his sentence from 24 months to just 8 months. (Reporters later overheard KBW attorney Mitch Kleinman in the courthouse saying, "She bought it hook, line and sinker.") Though an appeals court overturned McDermott's conviction in 2001, saying his mistress had been unfairly portrayed as a prostitute, McDermott decided against a new trial and instead pleaded guilty to one charge of insider trading. In the end, he lost $25,000 in fines and five months of freedom.

 

 

Sam Waksal

CEO: ImClone

Convicted: October 15, 2002 of securities fraud, bank fraud, obstruction of justice, and perjury

Known for his networking skills as much as for his scientific expertise, immunologist Sam Waksal founded ImClone in 1984. The New York-based biotech firm remained relatively unknown until 1999, when it announced the creation of Erbitux — a cancer-fighting drug so promising it convinced pharmaceutical giant Bristol-Myers to purchase $1 billion of ImClone stock in one of the largest biotechnology partnerships in U.S. history. But when the Food and Drug Administration rejected the drug, Waksal alerted several relatives and friends to dump their stock as soon as possible — before the FDA's decision had been made public. Waksal's father and daughter sold $9.2 million worth of ImClone, a move that caught the attention of the SEC and eventually led to his arrest.

Though Waksal pleaded guilty and publicly apologized to his family, his colleagues, and the millions of cancer patients who had held such high hopes for Erbitux, Judge William Pauley dismissed calls for leniency, noting that Waksal had contributed a mere one-half of 1 percent of his $133 million fortune to charity. In the end, the fallen entrepreneur paid $4.3 million in fines and tax restitution, and served 87 months in prison; he was released on Feb. 9, 2009. The scandal's most infamous casualty, however, turned out to be Waksal's pal, Martha Stewart, who had unloaded all 3,928 of her company shares just days before the FDA's decision had been announced to avoid losing an estimated $45,673; the domestic diva got five months in prison as a result.

 

 

Sam Israel

CEO: Bayou Group hedge fund

Convicted: Fraud in April 2008

Sam Israel III, 49, didn't hear any fat lady sing. After his conviction for defrauding investors of more than $450 million, the Connecticut-based executive decided 20 years in prison wasn't quite his style. Instead of reporting for jail in June 2008, he faked his own suicide — not very well, it must be said — by leaving his SUV on a bridge in upstate New York with the message "Suicide is Painless" (from the M.A.S.H. theme song) scrawled on the vehicle's dusty hood. Israel never really had authorities fooled. Video captured by a nearby security camera showed another car pulling up behind his GMC Envoy shortly before it was abandoned; police suspected it was a getaway car being driven by an accomplice. Days later, Israel's girlfriend Debra Ryan was arrested in connection with his disappearance. Finally, after about a month on the lam (and a place of honor on the U.S. Marshals' most wanted list), Israel rode a scooter to a Southwick, Mass. police station on July 2 and turned himself in at his mother's urging. She had been in touch with U.S. Marshals to let them know she had spoken to her son and coaxed him to do the right thing. For failing to report to prison, Israel faces an additional 10 years behind bars; he will be sentenced June 24.

 

 

Bernie Ebbers

CEO: WorldCom

Convicted: 03/15/2005 on nine counts of conspiracy, securities fraud and making false regulatory filings

Note to aspiring CEOs: If your company is staggering under massive debt, don't orchestrate an $11 billion accounting fraud to try to cover it up. It doesn't' work.

Bernie Ebbers turned WorldCom into the nation's second largest long distance telecommunications company through a series of rapid acquisitions that left it heavily in the red. In 2002, the Mississippi-based company admitted to improperly reporting $3.8 billion in expenses, prompting Justice Department to open a criminal investigation into its business practices. The Securities Exchange Commission, meanwhile, focused on $400 million that WorldCom personally loaned Ebbers.

WorldCom eventually filed for bankruptcy, and its stock price tumbled from $64 per share to a little over $1. Ebbers' "I had no idea what was going on" defense didn't work; he was convicted of securities fraud, conspiracy and seven counts of filing false reports with regulators. Ebbers is now serving a 25-year sentence in a minimum-security Louisiana prison.

Update: Gregory Reyes, former CEO of Brocade Communications Systems, has been removed from this list after his conviction on charges of backdating stock options was thrown out by a Federal appeals judge in August 2009.

 

Who to Blame? Who to Blame? that's what we always want to know and it's one that the world is wondering in regard to the messy financial crisis, if you look closely there's lots of people to blame really, some more than others, so here's a list of people to blame when your pissed off that your dollar doesn't go nearly as far as it did before this or when your house is about to be foreclosed on here's some people to blame for the mess we're in.

Angelo Mozilo

The son of a butcher, Mozilo co-founded Countrywide in 1969 and built it into the largest mortgage lender in the U.S. Countrywide wasn't the first to offer exotic mortgages to borrowers with a questionable ability to repay them. In its all-out embrace of such sales, however, it did legitimize the notion that practically any adult could handle a big fat mortgage. In the wake of the housing bust, which toppled Countrywide and IndyMac Bank (another company Mozilo started), the executive's lavish pay package was criticized by many, including Congress. Mozilo left Countrywide last summer after its rescue-sale to Bank of America. A few months later, BofA said it would spend up to $8.7 billion to settle predatory lending charges against Countrywide filed by 11 state attorneys general.

Phil Gramm

As chairman of theSenate Banking Committee from 1995 through 2000, Gramm was Washington's most prominent and outspoken champion of financial deregulation. He played a leading role in writing and pushing through Congress the 1999 repeal of the Depression-era Glass-Steagall Act, which separated commercial banks from Wall Street. He also inserted a key provision into the 2000 Commodity Futures Modernization Act that exempted over-the-counter derivatives like credit-default swaps from regulation by the Commodity Futures Trading Commission. Credit-default swaps took down AIG, which has cost the U.S. $150 billion thus far.

Alan Greenspan

The Federal Reserve chairman — an economist and a disciple of libertarian icon Ayn Rand — met his first major challenge in office by preventing the 1987 stock-market crash from spiraling into something much worse. Then, in the 1990s, he presided over a long economic and financial-market boom and attained the status of Washington's resident wizard. But the super-low interest rates Greenspan brought in the early 2000s and his long-standing disdain for regulation are now held up as leading causes of the mortgage crisis. The maestro admitted in an October congressional hearing that he had "made a mistake in presuming" that financial firms could regulate themselves.

Chris Cox

The ex-SEC chief's blindness to repeated allegations of fraud in the Madoff scandal is mind-blowing, but it's really his lax enforcement that lands him on this list. Cox says his agency lacked authority to limit the massive leveraging that set up last year's financial collapse. In truth, the SEC had plenty of power to go after big investment banks like Lehman Brothers and Merrill Lynch for better disclosure, but it chose not to. Cox oversaw the dwindling SEC staff and a sharp drop in action against some traders.

American Consumers

In the third quarter of 2008, Americans began saving more and spending less. Hurrah! That only took 40 years to happen. We've been borrowing, borrowing, borrowing — living off and believing in the wealth effect, first in stocks, which ended badly, then in real estate, which has ended even worse. Now we're out of bubbles. We have a lot less wealth — and a lot more effect. Household debt in the U.S. — the money we owe as individuals — zoomed to more than 130% of income in 2007, up from about 60% in 1982. We enjoyed living beyond our means — no wonder we wanted to believe it would never end

Hank Paulson

When Paulson left the top job at Goldman Sachs to become Treasury Secretary in 2006, his big concern was whether he'd have an impact. He ended up almost single-handedly running the country's economic policy for the last year of the Bush Administration. Impact? You bet. Positive? Not yet. The three main gripes against Paulson are that he was late to the party in battling the financial crisis, letting Lehman Brothers fail was a big mistake and the big bailout bill he pushed through Congress has been a wasteful mess.

Joe Cassano

Before the financial-sector meltdown, few people had ever heard of credit-default swaps (CDS). They are insurance contracts — or, if you prefer, wagers — that a company will pay its debt. As a founding member of AIG's financial-products unit, Cassano, who ran the group until he stepped down in early 2008, knew them quite well. In good times, AIG's massive CDS-issuance business minted money for the insurer's other companies. But those same contracts turned out to be at the heart of AIG's downfall and subsequent taxpayer rescue. So far, the U.S. government has invested and lent $150 billion to keep AIG afloat.

Ian McCarthy

Homebuilders had plenty to do with the collapse of the housing market, not just by building more homes than the country could stomach, but also by pressuring people who couldn't really afford them to buy in. As CEO of Beazer Homes since 1994, McCarthy has become something of a poster child for the worst builder behaviors. An investigative series that ran in the Charlotte Observer in 2007 highlighted Beazer's aggressive sales tactics, including lying about borrowers' qualifications to help them get loans. The FBI, Department of Housing and Urban Development and IRS are all investigating Beazer. The company has admitted that employees of its mortgage unit violated regulations — like down-payment-assistance rules —at least as far back as 2000. It is cooperating with federal investigators.

Frank Raines

The mess that Fannie Mae has become is the progeny of many parents: Congress, which created Fannie in 1938 and loaded it down with responsibilities; President Lyndon Johnson, who in 1968 pushed it halfway out the government nest and into a problematic part-private, part-public role in an attempt to reduce the national debt; and Jim Johnson, who presided over Fannie's spectacular growth in the 1990s. But it was Johnson's successor, Raines, who was at the helm when things really went off course. A former Clinton Administration Budget Director, Raines was the first African-American CEO of a Fortune 500 company when he took the helm in 1999. He left in 2004 with the company embroiled in an accounting scandal just as it was beginning to make big investments in subprime mortgage securities that would later sour. Last year Fannie and rival Freddie Mac became wards of the state.

Kathleen Corbet

By slapping AAA seals of approval on large portions of even the riskiest pools of loans, rating agencies helped lure investors into loading on collateralized debt obligations (CDOs) that are now unsellable. Corbet ran the largest agency, Standard & Poor's, during much of this decade, though the other two major players, Moody's and Fitch, played by similar rules. How could a ratings agency put its top-grade stamp on such flimsy securities? A glaring conflict of interest is one possibility: these outfits are paid for their ratings by the bond issuer. As one S&P analyst wrote in an email, "[A bond] could be structured by cows and we would rate it."

Dick Fuld

The Gorilla of Wall Street, as Fuld was known, steered Lehman deep into the business of subprime mortgages, bankrolling lenders across the country that were making convoluted loans to questionable borrowers. Lehman even made its own subprime loans. The firm took all those loans, whipped them into bonds and passed on to investors billions of dollars of what is now toxic debt. For all this wealth destruction, Fuld raked in nearly $500 million in compensation during his tenure as CEO, which ended when Lehman did.

Marion and Herb Sandler

In the early 1980s, the Sandlers' World Savings Bank became the first to sell a tricky home loan called the option ARM. And they pushed the mortgage, which offered several ways to back-load your loan and thereby reduce your early payments, with increasing zeal and misleading advertisements over the next two decades. The couple pocketed $2.3 billion when they sold their bank to Wachovia in 2006. But losses on World Savings' loan portfolio led to the implosion of Wachovia, which was sold under duress late last year to Wells Fargo.

Bill Clinton

President Clinton's tenure was characterized by economic prosperity and financial deregulation, which in many ways set the stage for the excesses of recent years. Among his biggest strokes of free-wheeling capitalism was the Gramm-Leach-Bliley Act, which repealed the Glass-Steagall Act, a cornerstone of Depression-era regulation. He also signed the Commodity Futures Modernization Act, which exempted credit-default swaps from regulation. In 1995 Clinton loosened housing rules by rewriting the Community Reinvestment Act, which put added pressure on banks to lend in low-income neighborhoods. It is the subject of heated political and scholarly debate whether any of these moves are to blame for our troubles, but they certainly played a role in creating a permissive lending environment.

George W. Bush

From the start, Bush embraced a governing philosophy of deregulation. That trickled down to federal oversight agencies, which in turn eased off on banks and mortgage brokers. Bush did push early on for tighter controls over Fannie Mae and Freddie Mac, but he failed to move Congress. After the Enron scandal, Bush backed and signed the aggressively regulatory Sarbanes-Oxley Act. But SEC head William Donaldson tried to boost regulation of mutual and hedge funds, he was blocked by Bush's advisers at the White House as well as other powerful Republicans and quit. Plus, let's face it, the meltdown happened on Bush's watch.

Stan O'Neal

Merrill Lynch's celebrated CEO for nearly six years, ending in 2007, he guided the firm from its familiar turf — fee businesses like asset management — into the lucrative game of creating collateralized debt obligations (CDOs), which were largely made of subprime mortgage bonds. To provide a steady supply of the bonds — the raw pork for his booming sausage business —O'Neal allowed Merrill to load up on the bonds and keep them on its books. By June 2006, Merrill had amassed $41 billion in subprime CDOs and mortgage bonds, according to Fortune. As the subprime market unwound, Merrill went into crisis, and Bank of America swooped in to buy it.

Wen Jiabao

Think of Wen as a proxy for the Chinese government — particularly those parts of it that have supplied the U.S. with an unprecedented amount of credit over the past eight years. If cheap credit was the crack cocaine of this financial crisis — and it was — then China was one of its primary dealers. China is now the largest creditor to the U.S. government, holding an estimated $1.7 trillion in dollar-denominated debt. That massive build-up in dollar holdings is specifically linked to China's efforts to control the value of its currency. China didn't want the renminbi to rise too rapidly against the dollar, in part because a cheap currency kept its export sector humming — which it did until U.S. demand cratered last fall.

David Lereah

When the chief economist at the National Association of Realtors, an industry trade group, tells you the housing market is going to keep on chugging forever, you listen with a grain of salt. But Lereah, who held the position through early 2007, did more than issue rosy forecasts. He regularly trumpeted the infallibility of housing as an investment in interviews, on TV and in his 2005 book, Are You Missing the Real Estate Boom?. Lereah says he grew concerned about the direction of the market in 2006, but consider his January 2007 statement: "It appears we have established a bottom."

John Devaney

Hedge funds played an important role in the shift to sloppy mortgage lending. By buying up mortgage loans, Devaney and other hedge-fund managers made it profitable for lenders to make questionable loans and then sell them off. Hedge funds were more than willing to swallow the risk in exchange for the promise of fat returns. Devaney wasn't just a big buyer of mortgage bonds — he had his own $600 million fund devoted to buying risky loans — he was one of its cheerleaders. Worse, Devaney knew the loans he was funding were bad for consumers. In early 2007, talking about option ARM mortgages, he told Money, "The consumer has to be an idiot to take on one of those loans, but it has been one of our best-performing investments."

Bernie Madoff

His alleged Ponzi scheme could inflict $50 billion in losses on society types, retirees and nonprofits. The bigger cost for America comes from the notion that Madoff pulled off the biggest financial fraud in history right under the noses of regulators. Assuming it's all true, the banks and hedge funds that neglected due diligence were stupid and paid for it, while the managers who fed him clients' money — the so-called feeders — were reprehensibly greedy. But to reveal government and industry regulators as grossly incompetent casts a shadow of doubt far and wide, which crimps the free flow of investment capital. That will make this downturn harder on us all.

Lew Ranieri

Meet the father of mortgage-backed bonds. In the late 1970s, the college dropout and Salomon trader coined the term securitization to name a tidy bit of financial alchemy in which home loans were packaged together by Wall Street firms and sold to institutional investors. In 1984 Ranieri boasted that his mortgage-trading desk "made more money than all the rest of Wall Street combined." The good times rolled: as homeownership exploded in the early '00s, the mortgage-bond business inflated Wall Street's bottom line. So the firms placed even bigger bets on these securities. But when subprime borrowers started missing payments, the mortgage market stalled and bond prices collapsed. Investment banks, overexposed to the toxic assets, closed their doors. Investors lost fortunes.

Burton Jablin

The programming czar at Scripps Networks, which owns HGTV and other lifestyle channels, helped inflate the real estate bubble by teaching viewers how to extract value from their homes. Programs like Designed to Sell, House Hunters and My House Is Worth What? developed loyal audiences, giving the housing game glamour and gusto. Jablin didn't act alone: shows like Flip That House (TLC) and Flip This House (A&E) also came on the scene. To Jablin's credit, HGTV, which airs in more than 97 million homes, also launched Income Property, a show that helps first-time homeowners reduce mortgage payments by finding ways to economically add rental units.

Fred Goodwin

For years, the worst moniker you heard thrown at Goodwin, the former boss of Royal Bank of Scotland (RBS), was "Fred the Shred," on account of his knack for paring costs. A slew of acquisitions changed that, and some RBS investors saw him as a megalomaniac. Commentators have since suggested that Goodwin is simply "the world's worst banker." Why so mean? The face of over-reaching bankers everywhere, Goodwin got greedy. More than 20 takeovers helped him transform RBS into a world beater after he assumed control in 2000. But he couldn't stop there. As the gloom gathered in 2007, Goodwin couldn't resist leading a $100 billion takeover of Dutch rival ABN Amro, stretching RBS's capital reserves to the limit. The result: the British government last fall pumped $30 billion into the bank, which expects 2008 losses to be the biggest in U.K. corporate history.

Sandy Weill

Who decided banks had to be all things to all customers? Weill did. Starting with a low-end lender in Baltimore, he cobbled together the first great financial supermarket, Citigroup. Along the way, Weill's acquisitions (Smith Barney, Travelers, etc.) and persistent lobbying shattered Glass-Steagall, the law that limited the investing risks banks could take. Rivals followed Citi. The swollen banks are now one of the country's major economic problems. Every major financial firm seems too big to fail, leading the government to spend hundreds of billions of dollars to keep them afloat. The biggest problem bank is Weill's Citigroup. The government has already spent $45 billion trying to fix it.

David Oddsson

In his two decades as Iceland's Prime Minister and then as central-bank governor, Oddsson made his tiny country an experiment in free-market economics by privatizing three main banks, floating the currency and fostering a golden age of entrepreneurship. When the market turned ... whoops! Iceland's economy is now a textbook case of macroeconomic meltdown. The three banks, which were massively leveraged, are in receivership, GDP could drop 10% this year, and the IMF has stepped in after the currency lost more than half its value. Nice experiment.

Jimmy Cayne

Plenty of CEOs screwed up on Wall Street. But none seemed more asleep at the switch than Bear Stearns' Cayne. He left the office by helicopter for 3 ½-day golf weekends. He was regularly out of town at bridge tournaments and reportedly smoked pot. (Cayne denies the marijuana allegations.) Back at the office, Cayne's charges bet the firm on risky home loans. Two of its highly leveraged hedge funds collapsed in mid-2007. But that was only the beginning. Bear held nearly $40 billion in mortgage bonds that were essentially worthless. In early 2008 Bear was sold to JPMorgan for less than the value of its office building. "I didn't stop it. I didn't rein in the leverage," Cayne later told Fortune.