Sadly, this reporter does not do a good job of identifying and explaining issues so let’s do it for her:
1. If this Justin Paperny was siphoning off money from client accounts, that is theft. Not “fronting for a Ponzi scheme.” That is something that, sadly, happens every once in a while and the investment banks need to do a better job of catching it. However, its not evidence of some systematic fraud.
2. If he sold investments in a hedge fund that collapsed, he and others are guilty of not doing due diligence. This is closer to “fronting for a Ponzi scheme” but its not as if the bank set it up. This, sadly, happened more than it should have. Banks sold investments in pooled investment vehicles without the proper due diligence. Its bad but it isn’t a crime unless there is evidence of kickbacks or intent ot defraud.
3. Which brings us to the true Wall Street “Ponzi Scheme” which is that these young bankers got paid on the upside but did not have any consequences for the downside. When everything went to Hell, Wall Street went screaming to the government (ie, taxpayers) for a bailout. They did not have to face the consequences (ie, bankruptcy, personal lawsuits against bankers, etc) of their risk seeking behaviour. That is the true crime of it all, and its a crime that was legal.