Category: business ethics

Bernie Madoff Targets Banks and Hedge Funds: “They Had to Know” (via Sense On Cents)

On By southwerkIn business ethics
Larry Doyle

From Larry Doyle’s Blog, Sense on ¢ents:

Bernie Madoff deserves zero sympathy and less attention. On the other hand, those seriously impacted by his crimes deserve not only sympathy but also recompense. Irving Picard, the trustee pursuing that recompense on behalf of Madoff investors, is making some high profile claims and has generated substantial results. That said, selected Madoff investors have informed me that they give Picard very mixed reviews.

Doyle goes on to discuss Madoff’s recent comments that others had to know about what he was doing. Doyle believes like me that it is not possible to move that kind of money around without someone realizing that something was wrong.

The article continues –

I have no doubt that the Wall Street banks and a variety of hedge funds knew, should have known, or did not want to know what was truly transpiring within Madoff’s operation.

But, let’s go deeper than that. Who is charged with keeping these banks honest? What about the regulators? Not that Bernie has any real credibility, but why isn’t he compelled to provide further testimony about those who regulated his enterprise, specifically the NASD, its offspring FINRA, and the SEC?

Right. How come the various federal agencies are not investigating this?

Because they don’t want to.

Because it would be embarrassing.

Because there would be political fallout.

It wouldn’t stop the feds from putting any of us in jail but assisting Madoff is no big deal because it wasn’t done by people like “us.”

James Pilant

Honest Cop Nears Retirement Sans Fair Deal During Career (via The Times of India)

On By southwerkIn business ethics8 Comments

Frank Serpico was an American (New York) police officer who refused to go along with departmental corruption. He later received the Medal of Honor, the New York Police Department’s highest award. Serpico was less than popular with his superiors and his fellow officers. There are strong suspicions that his shooting while making a drug bust was a set up by other policemen to get him out of the way.

Manoje Nath

In India there is a policeman called Manoje Nath.  He seems to upset his superiors as well.

From the article –

As Bokaro SP in 1980, he arrested the then Bokaro Steel MD in a corruption case and was handed transfer order within 24 hours __ only after four months in office. While in vigilance, he again ended up fraying his superiors’ ego as he raided three engineers in a case of corruption. For the next ten months, the cop had to make do without a vehicle and a telephone as he was made to wait for a posting. A departmental proceeding for disobedience was also initiated which the Patna high court later quashed.

This guy investigates where the career minded officer will not go.

My understanding is that he is currently teaching.

I’m deeply impressed by his career choices and wish him well.

James Pilant

(By the way, Nath has a blog called Musings. He is witty and eloquent. I recommend it.)

Nobody Goes To Jail?

On By southwerkIn business ethics

Matt Taibbi has it right –

Nobody goes to jail. This is the mantra of the financial-crisis era, one that saw virtually every major bank and financial company on Wall Street embroiled in obscene criminal scandals that impoverished millions and collectively destroyed hundreds of billions, in fact, trillions of dollars of the world’s wealth — and nobody went to jail. Nobody, that is, except Bernie Madoff, a flamboyant and pathological celebrity con artist, whose victims happened to be other rich and famous people.

The rest of them, all of them, got off. Not a single executive who ran the companies that cooked up and cashed in on the phony financial boom — an industrywide scam that involved the mass sale of mismarked, fraudulent mortgage-backed securities — has ever been convicted. Their names by now are familiar to even the most casual Middle American news consumer: companies like AIG, Goldman Sachs, Lehman Brothers, JP Morgan Chase, Bank of America and Morgan Stanley. Most of these firms were directly involved in elaborate fraud and theft. Lehman Brothers hid billions in loans from its investors. Bank of America lied about billions in bonuses. Goldman Sachs failed to tell clients how it put together the born-to-lose toxic mortgage deals it was selling. What’s more, many of these companies had corporate chieftains whose actions cost investors billions — from AIG derivatives chief Joe Cassano, who assured investors they would not lose even “one dollar” just months before his unit imploded, to the $263 million in compensation that former Lehman chief Dick “The Gorilla” Fuld conveniently failed to disclose. Yet not one of them has faced time behind bars.

Two kinds of justice? Is there one for you and I, and another for the great financial elites? Let’s say that I steal $100,000 dollars from my employer, if they press charges would I go to jail? Quite likely. What if I work for a giant investment bank and I commit fraud and other security violations to the tune of several hundred million dollars? Will I go to jail then? No.

What is going on here? This isn’t fair.

Why do we put people in jail or prison? To punish them and discourage others from committing the same offenses.

What message does this “two-tiered” system of “justice” send? It says that wrongdoing is okay if you are properly placed in the economy. If you are not placed in the right industry with the right friends and the right “law enforcement,” you can expect to be penalized when you commit crimes. The impact is clear, if you work in the financial industry you will not be punished for your financial crimes.

Do I have to tell you that giving sectors of the economy the right to commit crimes at will is bad policy? They will continue to do it.

In 2007, these crimes almost brought down the world economy. The damage done did through us into the Great Recession.

They walk free even after this.

What can be done?

James Pilant

“Bag Ladies” On Social Security?

On By southwerkIn business ethics
Bag Lady

From the Chicago Sun-Times by Terry Savage –

Fear of being a “bag lady” is the secret worry of every older woman. I’ve written and talked about this before, and the subject always gets a nod or a grimace of recognition.

No woman wants to be a burden on her children – or grow old alone, worry about money.

With our President and the Congress and the beltway commentators all determined to cut Social Security, we can expect the situation to get worse, probably much worse as what’s left of the safety net is dismantled.

Read a little more –

*Women are likely to have a longer period of chronic disability and are more likely to need care in a long-term facility or from a paid caregiver. This is compounded by the fact that women are more likely to be alone in old age and less likely to have a family caregiver.

*Fifty-five percent of female retirees and 71 percent of female pre-retirees are concerned that they might not have enough money to pay for health care costs in retirement, compared to 42 percent of male retirees and 63 percent of male pre-retirees.

People, real people, not financial funds, not mortgage foreclosures companies, are supposed be looked after by our government. We are not supposed to be tossing grannies on to the fire of maximized profits. But we are.

Making every American regardless of circumstances rely totally on their own resources for virtually every contingency seems to be the philosophy of government. But a bank can navigate a depression better than a human being and a bank is unlikely to get a degenerative disease that bankrupts a family and destroys every vestige of financial security.

We should be looking out for each other not making sure of the highest possible return on investments.

James Pilant6

On Truth and Friendship (via Simple Thoughts in a Complicated World)

On By southwerkIn business ethics2 Comments

A little Aristotle in the morning can’t hurt too much. This author has a good take on the subject. I enjoyed reading it and I’m sure you will too.

As my frequent readers will note I am a major fan of Aristotle, and I always appreciate another author’s take on the subject.

James Pilant

“Though we love the truth and our friends, reverence is due to the truth first.” -Aristotle, Nicomachean Ethics I have been reading Aristotle’s classic work Nicomachean Ethics for my Ancient and Medieval Ethics class. This is my second time through the work, though I am getting much more out of it on this read through. Aristotle makes many important distinctions even just in the first book of this work, but one sentence stood out and I decided to … Read More

via Simple Thoughts in a Complicated World

This Thursday, February 17, is designated “Internet Strikes Back” day to “counter Congressional opposition to a fair and open Internet (via vRRitti.com, providing sentiency)

On By southwerkIn business ethics

This is the day Congress votes on the issue of net neutrality. Heed the call and make your voice heard.

James Pilant

This Thursday, February 17, is designated “Internet Strikes Back” day to “counter Congressional opposition to a fair and open Internet Make no mistake: this will be a decisive vote. This is the only time that Congress will vote “yes or no” on Net Neutrality, so it’s crucial that they vote the right way. Help us send a clear message to Congress: a vote for the repeal act is a vote against internet users. In the coming days, we’ll be working to coordinate a national day of action on the 17th, when we’ll flood Congress with calls from Net Neutrality supporters.Here are three ways y … Read More

via vRRitti.com, providing sentiency

What’s MERS? We’ll ALL soon know their importance (via News Unwrapped)

On By southwerkIn business ethics1 Comment

I’ve written about MERS several times, most recently  MERS And Ownership and A Thirty Dollar Fee?

I’m astonished that any lawyer would have encouraged a mortgage bank into this kind of deal, but it was one of those free money things. Any bank using the MERS system paid no property transfer fees like everyone else. So, it was worth millions of dollars to use that system even though it had never been authorized by law in any state.

This is big news. If property cannot be transferred using the MERS system, hundreds of thousands of mortgage foreclosures were done outside the law and hundreds of thousands of pending foreclosures will not be possible.

(This web site, News Unrapped, is brand new and I would like my readers to take a good look at it and consider subscribing. jp)

James Pilant

What's MERS? We'll ALL soon know their importance BREAKING FINANCIAL NEWS >>> This is very big happenings for the entire financial system, including but not limited to banks and investment bankers , real estate owners and investors, stock owners (and all associated with that industry), as well as all of us who exist and are subject to market movement. For sure, there will be lots and lots of spin on t … Read More

via News Unwrapped

Net Neutrality and the First Amendment: Observations on the FCC’s order in Preserving the Open Internet (H. Travis) (via Marvin Ammori &)

On By southwerkIn business ethics

This is a detailed legal analysis of the FCC order regarding net neutrality. If you have an interest in net neutrality and the legal issues surrounding the order and its aftermath, you have a very fine references source here.

James Pilant

I would like to thank Marvin for inviting me to blog here for a while as part of his merry band of cyber experts.  I teach cyberlaw and other subjects at Florida International University College of Law in Miami, FL.  I typically write about copyright, Internet freedom, and human rights law.   Although my first post will be about net neutrality, I hope in the future to blog on my other interests, including copyright, fair use, the First Amendment, … Read More

via Marvin Ammori &

Welcome to my blog! (via Business and Life)

On By southwerkIn business ethics
New business ethics blog!

There is a new blog up dealing with business ethics. It just premiered today. I want everyone to extend a warm welcome to the newest blogger in the field.

James Pilant

Hello all! The purpose of my blog, Business and Life, is to teach people about ethical conduct within different facets of business. Ethical business conduct is becoming tougher and tougher to enforce with the advent of new technologies within businesses. Please check back soon for more posts. … Read More

via Business and Life

I’m Sick.

On By southwerkIn business ethics

I’m ill and having trouble posting. Sorry. I’ll be back as soon as I can.

jp