Did Bear Stearn fund execs flush ethics down the toilet?
I reprimanded my six-year-old son this morning because he did not flush the toilet.
The way I see it, this is one of the many building blocks I am giving him so he can go out and be a productive citizen some day.
“Flush the toilet.” “Don’t hit your sister with a Hot Wheel.” “Don’t lie.” “Don’t steal.” “Don’t send incriminating emails that could someday come back to haunt you.”
So what the heck did the parents of Matthew Tannin and Ralph Cioffi teach them?
Tannin and Cioffi are two former hedge-fund managers for Bear Stearns were arrested today. Supposedly, these two men knew their fund was “toast” but they still painted a rosy picture of the funds to investors. Investors ended up losing $1.6 billion.
Here are photos of Tannin and Cioffi:
It’s not a new story. This type of scam has happened at other firms. We all remember Enron. Executives saying everything is okay when clearly everything is not.
This morning, disgusted with yet another one of these situations, I look back and wonder, how were these men raised? My mom would say, “they were raised by wolves.”
Since we know that’s not the case, I figured I’d ask an ethics expert on whether these acts point to something amiss in a person’s upbringing.
Am I nuts to even consider this?
“No,” James Otteson, professor of philosophy and economics at Yeshiva College in New York, assures me.
Children, he says, need to develop a “deep sense of how their actions affect other people.”
This is not natural for human beings, he explains, so parents have to keep drumming this into their kids’ head, making it a habit to put yourself in someone else’s shoes, along the lines of, “What does Johnny think when you do that?” “Imagine what Johnny would feel.”
Without this basic empathy building block, it’s easy for individuals to do bad things without thinking about how their actions will impact others.
When you combine this attitude with the general predatory environment in certain areas of the business world today, he says, you have a lethal combination.
These hedge fund managers and corporate executives are dealing with ridiculous amounts of money, so they may begin to see investors as “tools, or pieces on a chess board they’re just moving around.”
We need to all get in the habit of thinking every day how our actions trickle down. Remember the circle of yelling theory? When you yell the people you yell at end up yelling, and so on and so on and so on.
The alleged actions of Tannin and Cioffi may have indirectly hurt thousands of individuals who lost lots of money and are now struggling to keep their homes, their lifestyles.
They were also stupid, it seems. The two guys actually corresponded via email about how the fund was in crummy shape several days before they told investors they were “quite comfortable” with the fund’s stability.
What were they thinking?
For a moment I started thinking we should all be more philosophical every day.
But then I started researching Tannin and Cioffi’s background and found out that Tannin actually had this foundation.
He was a Preston Warren scholar in philosophy at Bucknell University many years ago before heading for Wall Street.
I’m not kidding folks.
Here’s a definition of the prize from the University’s website:
The W. Preston Warren Prize, endowed by friends in honor of Professor Warren, for 26 years a distinguished professor of philosophy at Bucknell, is awarded to that senior majoring in philosophy who shows the greatest achievement and promise in philosophy.
Unfortunately, it appears it was all promise and no achievement for Tannin.
I guess he never learned early on to flush the toilet.
June 19th, 2008 at 10:47 am
Tannin did make a great contribution to philosophy: he provided a great case study that will be disected again and again and again as people try to understand the human condition.
June 19th, 2008 at 11:00 am
I have no empathy for either one of these guys. They are predators of the worst possible kind. They have inside information and total control over how this information is used. The investors put their faith in these guys based on the expectation that they will perform in a honest and ethical manner.
June 19th, 2008 at 11:52 am
Just another few examples to add to all the others we have. It is hard to make it to their level of financial success the honest and ethical way, for sure, and one unfortunate consequence of these types of actions is to create an aura of suspicion around all wall streetmoney and fund manager types that seemed to have goptten rich quick. I wonder how many of these guys would have skeletons in THEIR closets. Are there any honest and ethical ones out there? I am sure they are hard to find.
June 19th, 2008 at 2:03 pm
Eve
You know the problem with these guys being arrested is the fact that honest individuals have no chances. Here it is many of us are working hard to make a decent living. We try to play a fair game. we try to go by the rules. But, we still lose with guys like them with their unethical conscience. Remember Enron! The individuals that got arrested this morning and others like them are undermining the stock market. They are making the stock market a fraud. They may need to go to jail and wait before that, they need to pay back all(not some) of the money they misappropriate if any.
June 20th, 2008 at 11:14 am
Great article.Very sad situation.
June 20th, 2008 at 11:45 pm
Regulate, regulate, regulate. There is simply no other way to police our economic impactors except to further regulate virtually any and every transaction or occurence of postive wealth. Absolutely anyone, any where and and every time will take full advantage of any means to accomodate wealth. These men are no different than someone finding a wallet stuffed with dollar bills on an empty sidewalk. Of course you’d feel bad if you find someone’s home foreclosed because that was the payment in the wallet that kept it in their possesion, or would you care?
I actually aspire to the idea that there exist no infinity to wealth. As much as we want to believe otherwise, there is a definite limit to what is absolutely available. If by lying to accomodate more than what you should have is the best means available to achieve, you will fail, just as this incident proves. Had there been a more viligant regulation or regulator, this may have not occured. This was true a hundred years ago and is true today.
A man named Simon Cornelius was always at events in and around Pittsburgh. He’s be at fairs, at fireworks events, at the boat docks, any where you may find a crowd. When I was a child, he’d be at my home town’s little Labor Day fair. He never said much to anyone, however he was never intimidating. He was there when I’d take my children to Children’s museum and he would be there when we went to our water front to enjoy a clipper ride on our river’s. He had memorabilia such as balloons or footballs, Pirate hats, little Steeler keychains, and even the little trapeze man you have between two wooden dowels and move the dowels carefully and he’d walk up and down and the object was to keep the man on the sticks and watch him flip and come down. I did not know his name when my Dad bought me the man, but the vendors did uncharateristically stop and show me how and he said something remarkable that a 11 year old as i was at the time..he said’ that man is like all of us..we all flip around and hope we won’t fall off..”. That was proabably all i ever heard the vendor say except maybe fifty cents, because that is what his price was from the time i was a child till my children who are mostly grown…fifty cents. Sometimes he’d sell hot dogs two for fifty cents, sometimes one. His son was a customer of mine. He was sincere and never spoke much and is a very popular painter, house painter that is. When his Dad died in ‘95, I was obligated to go to the funeral home, I wanted to impress his son so he’d still buy my over-priced product(trust me, it is all the same). Well, it was I who was impressed. The fifty cent man was worth over a million dollars. His son and his sister were raised by him alone. Simon, my customer and his sister were simply, astonishingly honest. Simon Jr. and his sister were both reluctant to get married and have children because they felt how losing their mother during a stillborn child birth and refused to let anyone else go through that pain. simon the painter works constantly and he says honesty is exactly all that matters. Now how about that.