The SEC and Porn

Over the past five years, 33 SEC employees viewed pornographic materials on either or both their desktop computers or laptops. Seventeen of the 33 were senior SEC employees who earned between $99,000 and $222,000 per year. The employees have been disciplined, including suspensions and terminations. One senior enforcement attorney was devoting a full 8 hours per day to viewing porn. Little wonder that a few Ponzi schemes passed them by. One accountant was denied access to a porn site 16,000 times by a government firewall.  Persistence is a virtue in many areas, but . . .

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The Pharma Fines for Off-Label Marketing Round-Up

Here’s the tally of fines for the past year for illegal marketing of drugs:

AstraZeneca                       $520 million                                                                    Seroquel

Pfizer                                   $2.3 billion          ($1.3 billion criminal)                      Bextra

Eli Lilly                                 $1.9 billion          ($515 million criminal)                    Zyprexa

Bristol-Myers Squibb        $515 million                                                                        Abilify

Johnson & Johnson           $81 million                                                                           Topamax

 

Illegal marketing means that the companies were touting the drugs Continue reading

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Justice and Pilfering: Curbing Employee Theft

In tough economic times, employers keep a closer eye on expenses.  They watch that bottom line and they cut out office parties, employee discounts, and other perks.  In tough economic times, employees steal more from their employers.  They do so because they lost their parties, discounts, and perks.  Worse, it is the most trusted employees who bump up those travel expenses just a bit and pocket office supplies for use at home.  What does the pilferer look like?  According to a Price Waterhouse study:

Average length of employment:     7.5 years

Average age:                                           Between the ages of 31 and 40

Gender                                                       88% male

Education                                                 38% hold a college degree

                                                                      12% hold a postgraduate degree

Monitoring does not do the trick.  About 20% of companies are doing more audits of employee expenses and office supply inventory. Another 17% are adding security measures, including monitoring.  However, emphasizingthe code of conduct, integrity, and honesty do have a substantial impact.  We all need the reminders. And we seem to be deterred when we are given that nudge toward ethics.

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“I have misspoken about my service.” Connecticut Attorney General Richard Blumenthal on his statements that he “served” in Vietnam. Mr. Blumenthal served in the Marine Corps reserves for 6 years, none of which were overseas.

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When Safety Trumps Budget: Boeing

Boeing has been getting some bad press for delays in delivery of its 787 Dreamliner.  The company has faced everything from supplier lag to failed stress tests and is now 2.5 years behind schedule on its deliveries. The profits are postponed, customers have canceled, analysts are skeptical, and Boeing must ante up penalties for delays.   But, in the words of the youth, we may be “way harsh” on the company.  The Barometer cannot gauge the supply chain issues; they are best left to my esteemed colleagues in that field.  However, last year and again just two months ago, Boeing engineers found 787 design issues that could lead to structural failure. Bless their hearts; they threw down the flag.  However, the engineers threw down the flag in December 2009.  Boeing announced the delay at that time but attributed it to supplier lag.  In May 2010, a blogger reported Continue reading

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Moral Babies

On May 9, 2010, Yale psychologist Dr. Paul Bloom had an intriguing article in The New York Times Magazine, “The Moral Life of Babies.”  If this brief excerpt does not pique your curiosity or restore your faith in human nature, well, you may be unmovable.

Not long ago, a team of researchers watched a 1-year-old boy take justice into his own hands. The boy had just seen a puppet show in which one puppet played with a ball while interacting with two other puppets. The center puppet would slide the ball to the puppet on the right, who would pass it back. And the center puppet Continue reading

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The Dent in the Door

If you put a dent in the door of the car next to you but no one saw you do so, would you leave a note for the owner of the other car? The Barometer’s students often respond, ‘What do you mean, like  a meaningful note or can I just look like I am writing one?”  What if you were the driver of the car with the dented door and left a note on the windshield of the culprit car?  If you were the culprit, would you respond and ‘fess up? The Barometer’s door was dented by the rather long doors of a new Ford Mustang on graduation morning at ASU’s Parking Structure I.  The Barometer left a note on the windshield Continue reading

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The Rebuilt Car and the Accident

He was a young car-hop at the time.  The 17-year-old witnessed a salesman at the car dealership sell a woman a “new car.”  But the young employee knew that the car was not new; it had an engine that had been rebuilt and had also had some fairly extensive body work.  He was worried. Should he tell someone?  He needed his job but he knew it “just wasn’t right.”  He watched as the salesman handed the keys to the car over to the proud owner.  He took a few steps toward her.  He was going to tell her and let the cards fall where they may. Continue reading

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“I don’t want to be on my deathbed thinking that I kept a bunch of musicians from making money. I have a lot of work to do to get my karma scores up.” Mark Gorton, CEO of LimeWire, a file-sharing service ordered by a federal court to pay $450 million for copyright infringement.

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Facebook Privacy: Oxymoronic

The folks who post pictures of themselves hugging and chugging were outraged.  Why the things they were posting on their Facebook pages were showing up elsewhere on the web and were being used to generate advertising dollars.  Oh, what times are these when we realize there is no privacy on the web.  Hackers have been able to obtain the credit card numbers of millions and proceed to charge yachts Continue reading

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“Once we re-enter a phase where markets have recovered and there is money to be made, the traders will be back saying to their compliance officers, ‘There’s too much control; let us make money.’” Criminal defense lawyer, Stephane Bonafissi

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There will be another Jérôme Kerviel.

Just as Joseph Jett of Kidder Peabody followed Nick Leeson of Barings Banks, another trader will follow Jérôme Kerviel of Société Générale.  There will always be rogue traders in banks that turn a blind eye to under-achievers who defy all odds to produce gains that are inexplicable but always welcomed. The under-achievers are always thrown under the bus as diabolical thieves but as long as there is complicity in everything from lax internal controls to a blind eye, banks will foot the eventual losses that travel on the same side of the street as these too-good-to-be-true traders, aka Continue reading

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BP: The Barometer Tried To Warn You

P = f(x).  The probability of a safety conscious decision being made is a direct function of budgets and margins. Put them both together in a meeting and budgets will rule.  When all the analyses on BP’s Deepwater Horizon well are done we will find this inherent tension was at the root of the Gulf Coast disaster.  Indeed, we already have evidence of BP’s shortcuts in the critical path and decisions that fell well short of industry standards.  BP was notorious for coming out on the wrong side of the safety/budget conflict.  In Marianne M. Jennings, Case Studies in Business Ethics, 6th Ed. (2007), BP appeared in a case study used to teach students about the risks of failure to manage the  P = f(x) tension. Continue reading

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“The governor’s judgment is horrible. I mean horrible. Just horrible.” Defense attorney Sam Adams Jr. in his opening statement for his client, Rod Blagojevich. With defense lawyers like this . . who needs a prosecutor?

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