Changes

==Financial crisis and the bailout==

In 1975, the SEC’s trading and markets division ruled that investment banks must maintain a debt-to-net capital ratio of less than 12 to 1. In 2004, following extensive lobbying by the investment banks, the SEC under chairman Christopher Cox authorized five investment banks to develop their own net capital requirements. This enabled investment banks to push borrowing ratios to as high as 40 to 1.<ref>Stephen Labaton, [http://www.nytimes.com/2008/10/03/business/03sec.html Agency’s ’04 Rule Let Banks Pile Up New Debt], NY Times, October 8, 2008. Retrieved October 9, 2009</ref> These five investment banks were Goldman Sachs, [[Morgan Stanley]], [[Lehman Brothers]], [[Bear Stearns]], and [[Merrill Lynch]]. This very high debt-to-reserves helped lead to the financial crisis of 2008 by weakening the ability of these institutions to recover from losses incurred when the risky CDO and CDS bets failed.<ref>Julie Satow, [http://www.nysun.com/business/ex-sec-official-blames-agency-for-blow-up/86130/ Ex-SEC Official Blames Agency for Blow-Up of Broker-Dealers], NY Sun, September 18, 2008. Retrieved October 9, 2009</ref><ref>Ben Protess, [http://www.propublica.org/article/flawed-sec-program-failed-to-rein-in-investment-banks-101 ‘Flawed’ SEC Program Failed to Rein in Investment Banks], ProPublica, October 1, 2008. Retrieved October 9, 2009</ref>

Morgan Stanley received $10 billion in TARP bailout funds.

Decade-long campaign contribution total (1998-2008): $20,835,000.<ref name="Sold Out">[http://www.docstoc.com/docs/4647166/Sold-Out---How-Wall-Street-and-Washington-Betrayed-America Sold Out - How Wall Street and Washington Betrayed America ], Consumer Education Foundation, March, 2009.</ref>

<ref>[http://www.opensecrets.org/pacs/lookup2.asp?strID=C00337626&cycle=2006 2006 PAC Summary Data], ''Open Secrets'', accessed July 2007.</ref>

Decade-long lobbying expenditure total (1998-2008): $28,635,440<ref name="Sold Out"/><br>