The Street: Wall Street Whispers: Bank Stocks' Real Risk

Professor Michael Driscoll discusses effects of mortgage-related litigation aimed at banks:

“Any time there’s any kind of a whiff of bad news, negativity, scandal, whatever you want to call it, the first reaction on the part of institutional investors is to sell the stock, then see what happens,” says Michael Driscoll, a former Bear Stearns executive who now teaches business at Adelphi University. “They have no problem going back into it — even at a higher price if things do recover — but the initial reaction is always to sell these days.”

Driscoll calls this the “Enron syndrome” — a reference to the lesson learned by investors who rode that stock down to zero.

Read the full article from The Street