The Ethical Barometer

Is it any wonder we have federal budget difficulties? Take a gander at the money management skills at former Senator Jon Corzine’s MF Global firm and you witness activities that give a whole new meaning to the term “shell game.” What has emerged about the frantic transfers of funds during MF Global’s final days before bankruptcy is disturbing on so many levels, but there are two shining exemplars amongst the rubble and now emerging ruffian tactics of the firm taking money from Peter to pay Paul, even as Peter was clueless about the use of his funds. Oh, what backbone was demonstrated amongst the desperation!

As MF Global tried to transfer funds to settle accounts with trading partners, the folks at JPMorgan Chase put out a big, “Whoa, partner!” and questioned the source of the funds being used. The bank with a backbone Continue reading →

The human mind has unlimited capacity for finding ways to get around difficult task. The human mind coupled with YouTube may be unstoppable as it works to avoid work. Students are so quick with devices, mechanisms, and modes for cheating that one academic official has already waved the white flag, “We’re not catching them. We’re not even sure what’s going on.” (Greg Toppo, “eCheating: Students Spin a Web of Deceit on Tests,” USA Today, December 16-18, 2011, p 1A)

Here’s a list of the types of stratagems the little darlings in high schools and colleges have developed, with a little help from their YouTube friends, to cheat:
• The students have a program that allows them to print soft-drink labels that, Continue reading →

Organizations that experience ethical lapses that bring them front-page/Huffington Post headlines have common practices and issues. Penn State is now grappling with the departures of its president, athletic director, longstanding head football coach Joe Paterno, and a vice president following criminal charges of child sexual abuse against a former assistant football coach. Penn State lost so many leaders because of alleged failure to take action to stop the child sexual abuse, some of which may have occurred on the campus. MF Global’s bankruptcy trustee is hard at work trying to find $1.2 billion in missing client funds. MF Global collapsed after the firm’s former chairman, Jon Corzine, bet wrong on Greek government debt. Oddly, Mr. Corzine bet the funds would increase in value. Mr. Corzine has resigned, and it would be easier to list the federal agencies not investigating MF Global as opposed to listing those that are. From the SEC to the FBI to Congress, MF Global is under the microscope.

What do a hedge fund and a university have in common? Well, both are facing clean-up from accusations that destroy reputations and, in MF Global’s case, the ability to move forward. However, both may well be in their pickles because of decisions made as their ethical collapse lurched forward. One clear common factor Continue reading →

So read a Wall Street Journal headline yesterday – the former dogs are now the darlings. (Jonathan Craig, “Dividend Stocks Become the Heroes,” Wall Street Journal, Dec. 19, 2011, p. C1.) Well, the Barometer had a little book a few years back (co-authored with the late and great strategy professor, Louis Grossman) called: Building a Business Through Good Times and Bad: The Stories of Fifteen Companies, Each with a Century of Dividends. The book did an in-depth look at how these companies were able to come up with the cash, consistently, to pay their shareholders.
Oh, the mockery that ensued with the release of that book (about the time of the dot-com bubble), “Why would I care about being paid a dividend if the stock is increasing in value?” “A dividend is not a measure of performance!” The book ended up at about 1,768,819 on Amazon’s bestseller list. No one Continue reading →

The back doors of a courier van carrying $100,000 flung open whilst said van was traveling along the highways of Pittsburgh, Pennsylvania on November 30, 2011. Those bags of cash, along with $20- and $50-dollar bills floating in the air, made their way into the hands, cars, and trucks of passing motorists. When all was said and done, the drivers of the courier van had $400 to show for their day’s work. The remaining money had been taken by the good folk of Pittsburgh who must have assumed that it was some new kind of state lottery. The Barometer really does want to assume the best about the folks of her home state.

However, that good faith is dissipated when the police excuse the conduct. Lt. James Englert offered this defense, “There were $20 bills, $50 bills just swirling in the air. I think there was a great deal of confusion. It’s only understandable Continue reading →

MF Global, the hedge fund run into the ground by former senator/New Jersey governor, Jon Corzine, is in bankruptcy. For the record, New Jersey nearly experienced the same fate when Mr. Corzine was at the helm there. The ignominious collapse carries this added bonus: A cool $1.2 bil (at least) is missing, and the bankruptcy trustee is struggling mightily to figure out what happened. The Barometer is keenly aware when one of her children has “borrowed” a twenty from her wallet. Losing $1.2 bil staggers the imagination.

Last year, MF Global cut the pay of 1,121 employees. The 10% pay cut was not truly a pay cut, just an alteration in how compensation would be paid. The 10%, instead of being doled out in cash, would be used to purchase restricted stock in MF Global for those employees. The company saved $58 million in cash compensation with this new pay plan. For those of you attempting to keep score as you make about $1,121 per week, that translated Continue reading →

The Barometer knew it was bad, but even she was shocked by new levels of cheating at colleges and universities revealed in “The Shadow,” by Ed Dante ( thankfully , a nom de plume) in the November 12, 2010 issue of The Chronicle of Higher Education. The article was also reproduced in The Reader’s Digest and passed along to the Barometer from a teacher who was stunned and outraged.

Mr. Dante confesses to having written 12 graduate theses and 5,000 pages of essays, term papers, and all manner of academic assignments for “English-as-a-second language students, hopelessly deficient students, and lazy rich kids.” He worked full time from 2004 through 2010 at a company that employs a staff of 50 writers to do college-level writing for desperate students. And, by Continue reading →

Wang Yue, a toddler from China who had wandered away from her mother, was struck twice by one truck and then as she writhed in pain, struck again by another truck. As this little girl lay injured on the street, 18 people, over a period of 7 minutes, walked or rode their bicycles by, without stopping to help. Finally, an elderly scrap peddler stopped, dragged her to safety, and then found her mother. Little Yue-yue, as she has come to be known, clung to life via intubation for a few days and then left this life.

Many have offered explanations. None come close to a justification. One explanation is that Chinese culture teaches children to avoid trouble and not get involved. Rescuing a two-year-old tot is not the stuff of gang activity. But, others maintain, there is fear of liability. There have been a numbers of cases in China in which those who have helped the injured have been held liable for causing the injuries through the application of this brilliant analysis: Why else would you help someone if you didn’t hurt them in the first place? There are a few missing links between the post hoc and the propter hoc on that one. Some lawyers in China Continue reading →

Rachel Shteir has a new book, “The Steal: A Cultural History of Shoplifting.” The book explores the mental illness (kleptomania) angle as a cause for shoplifting. Psychopharmacology finds its way into root cause with discussion about a drug that helps alcoholics being used to bring shoplifters some relief. But, reading of the many examples, the shoplifter profiles, and descriptions of their booty gives some clues that go unexplored. A young man in Portland steals books from Barnes & Noble, “a conglomerate,” something he despises. One shoplifter with good taste only stole ties from Saks Fifth Avenue with a minimum retail price of $90. Some stole to give better gifts. Some are Winona Ryder and Lindsay Lohan.

Shoplifting is an odd crime, but it is a crime, Continue reading →