The Ethical Barometer

Herve Falciani, of Monaco, a former HSBC employee, now on the lam as he leaks account data from said Swiss banks.  He claims to have CD-ROMs just full of account numbers.

A jury found former Goldman trader, Fabrice Tourre, AKA “Fabulous Fab,” liable for civil fraud for his role in developing a CDO deal in 2007 without disclosing to investors that there was a conflict of interest on the selection of the mortgages in the underlying pool for the offering. To think that a then 28-year-old at Goldman came up with this plan all on his own staggers the imagination.  Mr. Tourre is a pitiful figure, short in stature and insecure in his e-mails, he was targeted Continue reading →

Mr. Rodriguez is not dumb. He just knows what he’s seen.  Mark McGwire is a hitting coach with the Dodgers.  Bob Nightengale and other sports writers argue every year for letting the juicers into baseball’s Hall of Fame. Most importantly, Mr. Rodriguez knows he got away with it before.  When there is no enforcement, you get more juicers and, then,  two-time juicers.  Mr. Rodriguez knows that everyone from the sports writers to the fans to the ball clubs to the networks to MLB love the homers.  They love the excitement juiced players brings.  No one is willing to give that up, including Mr. Rodriguez.  If you understand that, you realize that he’s not the dumb one.  Fool me once, shame on you.  Fool me twice, shame on me.

The late Joe Paterno, former head football coach at Penn State, to assistant football coach, Mike McQueary, in November 2011, just after the Jerry Sandusky (a former assistant football coach under Paterno) child abuse scandal broke.  Mr. Paterno was fired later that day by “Old Main” (the term used to describe the administrative building at Penn State).  This one goes into the “under the bus file.”  Turn over a problem to someone else to handle without follow-up and their inaction comes back to haunt you.

A Pew Research Center survey asked over 4,000 adults who contributes “a lot” to society. Their answers offer some insights for folks on the need to seek a higher purpose.  The best?  Military (78%), teachers (72%), and medical doctors (66%).  The worst?  Journalists (28%), business executives (24%), and lawyers (18%).

Actually, the TSA employees are stealing, doing drugs, and breaching the security systems intentionally.  But, rest assured, those who were stealing from passengers were reprimanded by a harsh letter to their files.    About half of the those disciplined for these activities got that cruel and unusual punishment.  That’ll sure teach ’em.   The managers should be disciplined for the lack of discipline of their employees. And senior management should at least be given a severe tongue lashing. Thank goodness our national security is in the hands of this crackerjack group.

After two years of work, a committee of formal prosecutors charged by New York City Commissioner Raymond Kelly to review the NYPD’s internal crime-reporting system has released its report.  The conclusion of the report is that officers and supervisors made “egregious” mistakes in classifying crimes in order to advance their careers. For example, felonies were changed to misdemeanors and robberies were classified as lost property reports.  Weak internal controls allowed officers to make the changes and keep those crime rates low.

Commissioner Kelly was grateful for the report and vowed to take action to tighten up the controls on reporting and discipline officers who “down code” crimes.  If you kept crimes down, you got rewarded.  Be careful how you measure the data for bonuses and incentives.  Employees will meet their numbers.  The numbers may not be real, but they will meet them — even in police precincts.

Ingrid Lederhaas-Okaun was Tiffany’s vice president of product development and she is now charged with the theft of 164 pieces of Tiffany’s jewelry.  The total value of the pieces is over $1,000,000. According to the criminal charges, Ms. Lederhaas-Okun took the pieces and then she and her husband sold them to a Manhattan buyer and seller of jewelry.  Interestingly, Ms. Lederhaas-Oku limited her selections to items under $25,000, your basic diamond bracelets, diamond earrings, and diamond pendants.  As the director of product development, she was permitted to check out jewelry items in order to have manufacturers determine whether they could produce the items.  However, all items over $25,000 were accounted for each day, whereas your $5000 and $10,000 items could be checked out for days at a time and no one would notice.

When Tiffany downsized in February, Ms. Lederhaas-Okun lost her job and an inventory followed whereupon the inventory shortages were uncovered.  The missing inventory corresponds to the inventory of the Manhattan jewelry buyer and seller.  Coincidence? The dealer has written 75 checks Continue reading →

MF Global’s global treasurer, Vinay Mahajan,  to the company’s CFO and another employee, referring to CEO Jon Corzine.  At the time, MF Global was dealing with a meltdown — the lack of cash and the reality that employees were transferring  funds from client accounts, funds that were to be segregated — a big no-no even in the wilds of Wall Street. Mr. Corzine and another executive, Edith O’Brien, have been sued civilly by the Commodities Futures Trading Commission for their roles in the funds transfers.

The Chinese know how to handle labor disputes.  The co-founder/co-owner of Specialty Medical Supplies, Chip Starnes, has been locked in his office at the company’s Beijing plant since Friday (that’s four days) by plant workers who are upset because they want severance packages.

The facility has been there for 10 years, but the company is moving production to Mumbai. Mr. Starnes says that he is not closing the Beijing facilities and the workers have misunderstood his intentions.  However, he has still not been permitted to leave.  The Chinese government brings in three meals per day, and one of the plant employees brought Mr. Starnes a cot so that he did not have to sleep on the floor.  Now that’s showing the boss who is boss.

The U.S. Embassy cannot get involved because this is a civil labor dispute.  Mr. Starnes is only imprisoned by his employees.The situation is a reminder for companies to proceed with caution, compassion, and care when using international production facilities.  Labor disputes are handled differently, but pink slips always generate wrath.  Who would have thought the Chinese would make the case for social responsibility in plants and pay and all matters labor.  The Barometer wonders how the NLRB would handle it if a GM plant manager were locked into an office at a closed Volt facility.