This article examines 48 well-known but little analyzed 1980s security fraud cases. Organizational and archival data, personal interviews, and court documents are used as data sources to define the networks involved in insider trading, parking, skimming warrants, taxfraud, and market manipulation. The fraud analyzed was embedded in a high information processing industry with fast-changing markets. It returned exceptional rewards to both host units and individual members who retained nearly one half of every million dollars they grossed from fraud. Findings demonstrate that securities fraud activities require high centrality and intensity of communication combined with highly centralized decision making. These characteristics are incompatible in most multidivisional decentralized firms. Fraud networks emulate neither the structural contingency nor the secrecy models. The answer is found in the structural transformation of securities firms, during the late 1970s and 1980s, from multidivisional to multisubsidiary structures.
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