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According to the Collins English Dictionary 10th Edition fraud can be defined as: "deceit, trickery, sharp practice, or breach of confidence, perpetrated for profit or to gain some unfair or dishonest advantage".[1] In the broadest sense, a fraud is an intentional deception made for personal gain or to damage another individual; the related adjective is fraudulent. The specific legal definition varies by legal jurisdiction. Fraud is a crime, and also a civil law violation. Defrauding people or entities of money or valuables is a common purpose of fraud, but there have also been fraudulent "discoveries", e.g. in science, to gain prestige rather than immediate monetary gain
*As defined in Wikipedia

Thursday, April 7, 2011

The Ethical Environment Around Goldman Sachs

Nitasha Tiku's article in the New York Mag entitled What We've Learned About Wall Street From Watching The Raj Rajaratnam Trial has some interesting points to make about the ethical environment that surrounds Wall Street Banks like Goldman Sachs.

In summary, they could be interpreted as follows:

1. The Rich are all about money;
2. The Rich are all about making money;
3. The Rich value good information (i.e., intelligence) about money;
4. The Rich like to work their magic in secret (i.e., without a paper trail);
5. The Rich and rich wannabes learn how to avoid paper trails (e.g, by using voice mail which is the favorite communication tool of Lloyd Blankfein);
6. When you are Rich, being caught and found guilty of fraud, for example, doen not mean the end of your financial career;
7. Ethics classes are not de rigueur for the financial elites.

Here's an excerpt from the article by Nitasha Tiku:

What We've Learned About Wall Street From Watching the Raj Rajaratnam Trial
by Nitasha Tiku - New York Mag

Depending on whom you talk to, the allegations of $63.8 million in securities fraud against the Galleon hedge-fund owner Raj Rajaratnam amount to either the biggest insider-trading case since Michael Milken or the largest insider-trading case, ever, period, the end. Twenty-seven people were charged, and nineteen have pleaded guilty. Authorities investigated Rajaratnam's alleged network of co-conspirators like they were the Sopranos, with 2,400 wiretaps producing 90 hours of tape. Thanks to those recordings and testimony from power brokers at Goldman Sachs, Intel, and McKinsey, the first few weeks of the trial have offered a rare glimpse into the Brioni-collared, Ferragamo-slippered tribe normally hidden behind closed doors. The defense has yet to present its arguments. But as the prosecution prepares to rest its case today, here’s what we learned so far.

Being Astronomically Rich Is All Relative
To the uninitiated, it might seem like Rajat Gupta had it made. The former head of McKinsey had a Harvard MBA, board seats at Goldman Sachs and Procter & Gamble, and a resplendent crown of hair to rival Alec Baldwin's. But even for established multimillionaires, cash rules everything around them. According to a wiretap between Rajaratnam and ex-McKinsey director Anil Kumar, Gupta was contemplating leaving Goldman for a gig at KKR, a global private equity firm. The two discussed Gupta's motivation:

"But is it really that he was so greedy for the $12 million that K.K.R. has offered him?” Mr. Kumar asks on the recording.

“I think he wants to be in that circle,” Mr. Rajaratnam says. “That’s a billionaire circle, right? Goldman is like the hundreds of millions circle, right?”

Sixty-three-year-old bankers take their cues from The Social Network. Lesson learned.

Read the full article here


Anonymous said...

Some people have a knack for telling it like it is....

"I have seen whole companies lose the sense of meritocracy, and become like an oligarchy run by a few strong personalities, and their inner
clique, stooges and girlfriends, and effectively destroy themselves while those running it line their pockets. There is an elite that is wreaking havoc on the US national level, and it is affecting the
global economy.

What struck me the most is the sheer banality and lack of honorable character, much less virtue, in these financial men and politicians.
The financial sorts such as Blankfein and Fuld are like caricatures of human beings. And the politicians are obviously phony and beneath
contempt, without honor, lacking even the common virtues underneath a cultivated facade, 'whited sepulchres, which appear beautiful outward, but are within full of dead men's bones and all uncleanness.'"

“False greatness is unsociable and remote: conscious of its own
frailty, it hides, or at least averts its face, and reveals itself
only enough to create an illusion and not be recognized as the
meanness that it really is. True greatness is free, kind, familiar and
popular; it lets itself be touched and handled, it loses nothing by
being seen at close quarters; the better one knows it, the more one
admires it.”

Jean de la Bruyere

Anonymous said...

Is anyone listening?

Cut Spending, Tax, Victimize Everyone, Fester, and Run

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