Category: business ethics

Mortgage Companies Flout The Law – 56,000 Foreclosures Suspended

On By southwerkIn business ethics, Capitalism, Corporate Social Responsibility, ethics, Government Failure, Philosophy of Business

When you file a foreclosure the law favors the bank. All the bank has to prove is that they have personal knowledge of the case. This eliminates the need for proving each individual mortgage.

So all they had to do to meet their legal requirements was to have someone review the file. Guess what? In their hurry to foreclose on as many homes as possible (tens of thousands), they just didn’t do it. Since they didn’t do it, there is no way to know how many homes they took wrongly, or if the amounts were right, etc.

This isn’t just sloppy work, it’s a case where these large companies, in particular, GMAC and Chase, violated the law by asserting that they had fulfilled their legal requirements when they had not. But to them that wasn’t important only that they close the cases by thousands a month. Can you conceive of anything more contemptuous of the law?

I’d been reading reports of homeowners who owned their homes outright being foreclosed on by these companies and having to hire attorneys to get it stopped. I just thought they fouled up here and there. No, they didn’t even try to do what they were supposed to do and as long as the courts accepted that they had “personal” knowledge, the machinery of foreclosure went on whatever the actual circumstances were.

If you want to know why people have been unable to renegotiate their mortgages, look no further. The bank suffered little or no expense from a high speed unwitnessed foreclosure. Renegotiation would have required work, personal knowledge and a concern for the customers. Those three things were not about to happen and I believe will not happen.

From the New York Times article –

The missteps stemmed from the affidavits the lenders file as they seek a quick or summary judgment in thousands of foreclosure cases. The affidavits state certain facts about the case, including the amount owed, which the signer indicates he has personal knowledge of. Without the affidavit, the lender would have to prove the facts at trial.

In depositions taken by lawyers for homeowners, executives at GMAC and Chase said they or their teams signed 10,000 or more affidavits and related documents a month. That did not give them time to review the cases.

Defense lawyers say the disclosures are symptomatic of the carelessness, if not outright fraud, that lenders have been exhibiting for years in their rush to file cases. Many necessary documents have disappeared, with defense lawyers saying the lenders often do not even have standing to foreclose.

Callousness, cruelty, pure injustice, contempt for the law, an apparent total complete lack of concern for the hundreds of thousands of mortgage holders – this is all here.

Now, the big question, are they going to be penalized? And I don’t mean that they have to do the mortgages over again, I mean contempt citations, I mean state’s attorney generals filing lawsuits to recover the sums illegally taken from homeowners, I mean a forced reconsideration, re analysis of every single mortgage, these blackhearted villains did.

You say, James, calm down, they just messed up on their procedure. No, they took thousands of people to court based on NO knowledge of the case. They didn’t know what the people owed, the history of the loans or, in fact, whether they owned the home or not!

And get a load of this – their attorneys signed on to it, put their names on it. Let’s see a little action there. Let’s see what the state bar associations think about this.

There’s a lot more to say and I want to get this up, so more later. People have to know.

James Pilant

Personal Dharma at work (via The Divine Comedy)

On By southwerkIn business ethics, Capitalism, ethics, Philosophy of Business

Well, it looks like India is catching up with America in terms of corporate financial scandals. What makes this blog really interesting, is that it’s from one of the people involved in breaking the case. It has a little bit of the detective in it. That’s rare in a business blog.

Further, our intrepid writer launches into a fairly lengthy discussion of business ethics, my turf. It’s a perceptive piece.

Please give it a read. Remember business ethics is a worldwide issue.

James Pilant

Today was the first day after the big day. Satyam finally came out with its financials last evening – restated to incorporate the impact of the 1.5 billion dollar scam perpetrated by its erstwhile chairman – in what can only be termed as India's answer to Enron. It was a proud moment for my team in finance – a moment of tremendous achievement and collaboration between us at the office of the Chief Financial Officer, our Finance team, our consulta … Read More

via The Divine Comedy

The Impact of the Deepwater Horizon Oil Spill (via James’ MBA Executive Learning Blog)

On By southwerkIn business ethics, Capitalism, Corporate Social Responsibility, Economic measurement, ethics, Government Failure, Philosophy of Business

This is an excellent thorough analysis of what happened and is happening. I’m delighted to have come across this kind of work. If you have any kind of interest in the gulf disaster or want to keep a link to where you can get ready information, I strongly recommend this article. It shows a lot of work and its cites demonstrates considerable effort.

James Pilant

The Impact of the Deepwater Horizon Oil Spill Introduction On the 20th April 2010 an explosion on the Deepwater Horizon drilling rig off the Gulf of Mexico caused the rig to sink. The tragedy that unfolded involved the death of 11 rig workers and an estimated release of 206 million gallons of crude oil into the Gulf of Mexico, (Webber 2010) and is the largest marine oil spill in history. (Robertson & Krauss 2010) This gigantic oil spill, until its capping on the 20th of September 2010, h … Read More

via James' MBA Executive Learning Blog

Business Ethics – India

On By southwerkIn business ethics, Capitalism, ethics

I wish there were more direct references to business ethics in the speeches of our politicians, and not just our politicians, the voices of the pulpit and law office are too often silent in this regard.

The is from a speech by the President of India, Shrimati Pratibha Devisingh Patil.

Finally, I would like to mention that business is for profit but it cannot be divorced from ethics. This basic principle should be the guiding principle for business houses and their management. For corporate India to become a credible partner in India’s progress, a trust based relationship between – government, organizations and society at large, is a must.

Forbidden Business Transactions – The Teachings Of Islam

On By southwerkIn business ethics, Capitalism, ethics, Philosophy of Business4 Comments

One of my good friends suggested I look at a short (20 page) article that is basically a lecture by Shaikh Saalih bin Fawzaan Al-Fawzaan. (Yes, that’s all one name. Shaikh” is a title given out of respect to any scholar or elderly person in Arabic. His name is “Salih” and “bin Fawzaan” means the son of Fawzaan.)

This is a great summary of the teachings of Islam as applied to business ethics. It is most impressive. This civilization has a lot to say about what is a legitimate business practice, and they don’t shy away from the concept of right and wrong.

Listen to this –

Also, the scholars of Fiqh have stated that what falls under Najash is when a seller tells his customer: “I bought this item for such and such price”, lying about the price, so that the buyer may be fooled and buy the item at an increased value. Or it is when the seller says: “I was given this product at this price” or he says: “I received it for this much”, lying about the price. He only wants to fool the customers into bidding the price up to reach this alleged and false price, which he claims he spent for the item. This is from the Najash, which Allaah’s Messenger (sallAllaahu ‘alayhi wa sallam) forbade. It is a treachery and deception of the Muslims, and it is lying and disloyalty, for which he will be accountable for before Allaah. So what is obligatory on the seller is that he reveals the truth if the buyer asks him how much he got it for. He must tell him the truth and not say that he attained it for this much money, lying about the price. What also falls into the definition of An-Najash is if the people of the marketplace or the storeowners agree to not outbid one another when an item is presented for sale, for the purpose of forcing the owner to sell it for a (discounted) cheaper price. So therefore, they are all participating in this act, which is Haraam. And this is from An-Najash. It is also a form of taking the people’s money unjustly.

Where do we in this culture have the courage to call the continuous wall of “PR” lies and distortions, treachery and deception? That’s wonderful teaching. Now there is much in this that is not in accordance with the common beliefs in the United States, but is not every single branch of the Christian religion committed like the religion of Islam to avoid the things of this world and not to be worldly? Is that not repeatedly stated in the New Testament?

A dose of of the business ethics teaching of Islam would not be to the detriment of this country, it would be a blessing.

James Pilant

Net Neutrality – Where Is The President?

On By southwerkIn business ethics, Capitalism, ethics, Government Failure2 Comments

During the campaign two years ago, Obama repeatedly stated his support for net neutrality – Watch!

Did you hear that – “I will take a backseat to no one.” Backseat! He might as well be in the trunk for all the help he’s been.

“I am a strong supporter of net neutrality.” Okay, that’s good. How about NOW? Where is he?

“I’m a big believer in net neutrality.” Still nice, but how about saying something now?

“I remain firmly committed to net neutrality.” Is he still? I don’t have anyway to know.

Okay, guys, probably you’ve seen enough. I can find more clips. I’ve already seen them. The open internet is under attack right now at the FCC and in Congress. A bill was considered a few days ago, that would have essentially ratified the agreement between Google and Verizon dividing up the internet and giving broadband to corporations. The attacks are well funded and continuous. The President referred to the danger of large companies getting control in his many speeches.

Where is he now? Where is the President of the United States? Where are all his pretty words? If he doesn’t speak soon, he will only be commenting on the division of the web into corporate sectors after it’s done.

If there is no net neutrality, this web site may become so slow as not to be viable or simply not deemed worthy of band width. Under the new rules, the FCC cannot issue any regulations but can hear complaints. Thus, if I am treated wrongly I will be able to complain to the FCC and should they decide in my favor after months during which my audience has gone away to other sites approved by the great media companies, that will fix everything, right? I’ll be all whole and returned to where I was. Right?

There are tens of thousands of sites like mine. And these voices cry out for advocacy for the poor, or the environment, etc.., some cry out for political action, …., some broadcast every crazy theory you can imagine, … and some are people just crying out that they are there – they are significant – they are important – they plead for attention and recognition.

And soon, these voices will be silent, their bandwidth divied up for movie companies and media channels and, of course, the occasional lapse where they allow a semi-independent voice to speak.

Pretty words are not the same as action. Eloquence is not the same as standing up for your beliefs. Political expedience cannot be an excuse of inaction where action has been repeatedly promised.

Where is the President? Did he mean any of that stuff he said? Is there time left for him to do or say anything?

James Pilant

Making The Evil Suffer!

On By southwerkIn business ethics, Capitalism, ethics, Philosophy of Business3 Comments

People ask me what can be done about corporate crime. Usually I say, “Enforce the laws we have on the books and make them do real prison time as well as pay fines.” That will go along way to stopping that kind of crime.

But there is something, we all can do – we can take our moral responsibilities seriously.

You see we depend on the state to enforce the law and generally we assume that is enough. It is not.

When a white collar criminal walks the street after a wrist slap of a fine, justice is defied and the nation tarnished.

But You have a duty to justice as well. People would think twice about committing crime if the passive acceptance that justice was done by prison or fine disappeared as people realized their continuing duty. How do you exercise your duty for justice? When you meet one of these thieves, walk to the other side of the street, refuse to shake their hand. When these criminals are hired by a new company that explains blithely that they want their expertise, you can stop doing business with that company.

But above all it is our silence that demonstrates our lack of commitment to the principles of justice and citizenship. These criminal should be afraid to walk the streets not because of physical danger but because they are likely to be cut or insulted.

“White collar” criminals (and I truly hate that phrase – whoever commits serious crimes against the larger society to the tune of millions of dollars is a scoundrel and a disgrace to be shunned and despised just like the lowest bank robber) live in a cocoon of comfort. They go to the right churches, have the right friends, zealous business writers will minimize or deny their guilt, and their connections in industry and government continue unabated. Everything they hear is that everybody does it and if only the little people, the little people like you, could understand their job pressures and the unreasonable nature of the regulations, and the cruelty of the prosecutor and the randomness of it all – (other people have done worse so why arrest me), you would not persecute them like Christ on the Cross but honor their contributions to society.

You have a duty to justice to shock them out of that cocoon, to make it hard for them to get work, to stigmatize them and make them suffer. Justice does not stop at the prison door. If we can maintain records of where pedophiles live, surely we can track the financial offenders who have stolen so much and damaged society so thoroughly.

It is for you as well as the government to wield the sword of justice. Do not forget your duty. Do not forget your nation and your responsibility to it. Remember the evil that these men have done.

Do not harm them physically, take them down a peg. Don’t hurt their bodies, hurt their feelings.

I tell you truly when the great malefactors of this society are punished by the public in this fashion, a very large portion of this kind of crime will simply disappear.

When we act as negatively toward a white collar criminal as we do a man wearing a shirt and pants with opposite patterns, when we are as critical of these criminals as we are of people who live on the streets, when we are as uncomfortable in their presence as when a thoughtless person talks loud and long on their cell phone, they will change their behavior.

James Pilant

Americans Believe Recession (Depression) Is Not Over

On By southwerkIn business ethics, Capitalism, Corporate Social Responsibility, Economic measurement, ethics, Government Failure, Philosophy of Business1 Comment

From a CNN story –

Seventy-four percent of Americans believe the economy is still in a recession, according to a new CNN/Opinion Research Corporation poll. Only 25 percent think the downturn is over.

One-third of Americans say the recession is serious, while another 29 percent characterize it as moderate.

Only the elite in the beltway believe the ridiculous idea that we have successfully come through the recession. I don’t understand how the numbers could add up to anything but a continuing crisis.

Unemployment – 9.6 percent – This doesn’t count those who have given up seeking work, so the real number is probably closer to 15.

Financial Markets – All Better? – NO – Federal Reserve Governor Kevin Warsh said on Tuesday that financial markets have not fully recovered after the financial crisis and that economic growth is currently weighted to government expansion.

Hiring – All better? – NO – U.S. chief executive officers’ view of the economy darkened in the third quarter, with top executives saying they were less willing to hire new workers as they fear sales growth will slow.

Consumer Confidence – Optimistic? – NO – When it comes to attitudes about the economy, Americans continue to see the glass as half empty, according to the latest reading on consumer morale. The Consumer Confidence Index fell to 48.5 in September — its lowest level in 7 months — and down from August’s negatively revised level of 53.2, the Conference Board, a New York-based research group that compiles the index, said Tuesday.

How long can I keep going? How long have you got?

The politicians and the commentators feel your pain from a safe distance. You’re just more economic data and an annoying one. If you would only believe, everything would be fine. Everybody is doing well. You just don’t see it because you can’t see the big picture obstructed as it is by your suffering. Don’t be pessimistic. Don’t you know that this is America and a good attitude can solve all your problems?

I get tired. You get up and you hear these criticisms of hard working Americans and the utter lack of comprehension of the beltway elites as to what the world is really like, and the next day it happens again. The cycle never ends. Americans are lazy, self-indulgent, and fat. They need to get tough, get smart and do what we, the real people, the people that count do. Learn from us, they say. These creatures who don’t live in a world of labor and pain, who live by manipulating money, shaping opinion, and other ill defined processes. They know how to fix your lives. Right, and I can build a nuclear weapon with a little barb wire and an old tire.

Well, tomorrow will be another day and the cycle will begin again.

James Pilant

My Buddy, Andrew, Comments On The Posting – Are Businessmen Smarter Than Children

On By southwerkIn business ethics, Capitalism, Government Failure, Philosophy of Business

As usual, Andrew has something clever to add to one of my posts. I would like you to read it. jp

A few years ago, I did an internship at the CSX Rail Yard in Waycross, GA. One day in the middle of september, I came in to hear that the EPA man was coming today to inspect the yard. As the intern, I was at the bottom of the food chain, and it was my job that day to escort the EPA man around to all of the facilities in the yard.

The inspection lasted until a little after lunch time. At almost every facility we went to, he wrote stuff down in this book he carried with him. At the end of the inspection, we went and met with the Plant Manager of the Locomotive Service/Repair Station, who is the man in charge of the entire yard. That day, CSX got fined $350,000 for environmental hazards and failure to comply with EPA regulations.

What suprised me is the reaction to this. CSX considered this a victory! “We ONLY got charged $350,000!!”. I understand that type of money is a drop in the bucket for what the major railroads make, but the moral issue there is what upset me.

I just thought I’d share my example to help further verify what you learned in law school.

Our Continuing Coverage – More On BRICKED Bank!

On By southwerkIn business ethics, Capitalism, ethics, Philosophy of Business2 Comments

Cameron Hope organized the bricking and had this to say. –

‘We blocked the doorway as a way of saying that the banks are open but the safe is shut.

‘The banks are stifling the recovery from the recession by not lending businesses any money.

‘Savers are getting nothing, borrowers are getting nothing and the banks are doing whatever they like. Some of the banks are even owned by the taxpayer and still they won’t lend.

‘This protest is saying enough is enough and the Government needs to step in and make the banks lend.’

The Daily Mail’s Make the Banks Lend campaign, on behalf of small firms turned down for credit, argues that the banks have money to spare, thanks to enormous funds provided by the taxpayer.

Instead of lavishing this cash on bankers’ bonuses, banks should be lending it at affordable rates to small enterprises – the backbone of the economy. Small and medium concerns provide 57% of all private sector jobs.

It is clever protest that is getting headlines around the world. However, Barclays Bank was not the original target. The protesters were unable to brick up the offending bank. So they picked another bank conveniently located. Press reports indicate that Barclays has a good reputation for continuing to give out small business loans.

If you read this column, you know I’m no shill for the banks. The offending bank was actually “Natwest.” If you want to deny them business, please do, but Barclays did not deny this businessman and his friends a loan.

(One of my clever readers, M. Perry, adds a helpful comment. –
Nat West was the original target to be bricked up because of its location in the centre of Bournemouth. HOWEVER, HSBC was in fact the bank that refused the loan, jeopardising Mr Hope’s business.)

James Pilant