This blog entry describes how and why opaqueness is a must on Wall Street and notes the obvious — that a drive to maintain informational advantage frustrated attempts to regulate (and continues to do so) dangerous practices of asymmetry.
Transparency is the enemy of information advantages, and opacity is the friend of high margin investment products. In the wake of unprecedented regulation after the dot-com bubble and the Worldcom and Enron scandals, Wall Street turned transparency and disclosure on its head by layering so many documents onto each other, few people ever bothered to read them. This obfuscation of otherwise transparent information recreated new informational asymmetries leading to new high margin businesses. Informational advantages are what drive Wall Street profits.
A drive to maximize informational advantage defeats market mechanisms and public regulatory efforts leading to both market and public value failure.