The moral failure is treating a retirement fund, and the people whose livelihoods depend on it, primarily as an opportunity for personal enrichment. Pension assets do not belong to the company in the ordinary sense. They are held in trust for the benefit of employees and retirees. The employer generally cannot withdraw funds while the plan is operating.
Wall Street was released in 1987, and the law regarding pensions has changed since then, in part to address employers reverting pension assets. As I understand it, there is a now a 50% excise tax on reversions, which are only allowed in specific circumstances. I imagine this tax is intended to discourage reversions.
Personally, I don't understand why any of the money I put away for retirement belongs to anyone but me. Usually such funds are managed by finance companies, not the employer, and the finance companies are already getting their cut, any lucky excess should come to me.
(The substance of the issue with overfunded pensions is itself a complicated separate topic, which I don't mean to oversimplify.)
Can I add another wrinkle: wealthy Gekko is obviously the villain, trying to raid pensions to expand his own coffers. Now, what if the pension raid is the cratering of index funds (and the financial contagion that follows)? What if the beneficiary isn't a rich financier, but a generation of workers who finally see asset prices plummet enough to allow them to afford homes, cars, etc.?
Seeing the parallels to our current (or coming) moment, I wonder how others read it.
His apparent reasonableness obscures the fact that he's appealing to the rapacious or covetous nature of the shareholders. He wants to override any moral objection to the fact that he's buying the company, in part, to strip the overfunded employee pensions, and by accepting his offer, shareholders get a cut. (IIRC, it's been decades since I saw the movie.)