The excesses of the current ‘subprime’ era are not the only excesses with ties to structured finance transactions. Many banks were sued by Enron Corporation. Enron filed suit in September 2003 against 11 banks, accusing them of conspiring with former Enron officials to manipulate the energy company’s finances. Enron says the banks helped set up a series of structured finance transactions with Enron that buried the company in debt, forcing it into bankruptcy. Every bank settled and paid Enron.

In March 2008 Citigroup, the last of the banks to settle, paid $1.66 billion to settle Enron litigation.

Many remember how the Enron debacle caused increased oversight in the form of Sarbanes-Oxley. Some of the same banks – international banks – complained about restrictions from Sarbanes-Oxley. Some even threatened to quit the U.S. stock market or leave the United States to escape what they called “oppressive needless scrutiny.” That was an empty threat. What did happen, however, is the same financial institutions later became embroiled in U.S. subprime, spreading financial infection around the world.