Over the past three years the US has experienced a complete financial meltdown of many banking and investment institutions unlike any other in the world. Sometimes the reasons for financial collapse of an organization can be laid at the feet of its key personnel and other times not. And on contrast, many times the egregious actions of important players in their own overall financial picture gives more than an opportunity for ponder and pause. Most often, fast and easy money seems to be the motivation for such conduct. Many psychologists suggest that Narcissistic Personality Disorder is common among those who exhibit behavior motivated by financial greed. There is a consensus of opinion that this particular disorder is manifested by rendering the host body and brain impotent to act in any other fashion except one for its own benefit regardless of how strong the protest. Not always does the punishment fit the crime.
Here are a few examples:
Winifred Jiau – Arrested in December, 2010, for allegedly selling inside information to three hedge funds and receiving $200,000 as payment through her employer, Primary Global Research LLC. She is the seventh person associated with Primary Global to be charged in a US insider-trading investigation. Ms. Jiau was employed as an expert-networking consultant and was arrested in Fremont, California. She is currently awaiting trial.
Michael Milken – As a result of an insider trading investigation, Mr. Milken, was indicted on 98 counts of securities fraud and racketeering in 1989. Described as the epitome of Wall Street greed in the 1980’s, in 1990 he pled guilty to six securities and reporting violations through a plea bargain. As a result, he was never convicted of racketeering or insider trading. Originally sentenced to ten years in prison, he was given a reduction in prison time for turning state’s evidence and good behavior, and was released in less than two years.
Currently Mr. Milken is described as a philanthropist, medical research innovator and financier for a non-profit, non-partisan economic think tank with an estimated net worth of US$2 billion in 2010.
Kenneth Lay – (04/15/42 – 07/05/06) Mostly remembered for his role in the Enron corruption scandal and found guilty in ten out of 11 counts of securities fraud, with an impending sentence of ten to 15 years per count. Mr. Lay died while on vacation in Snowmass, Colorado approximately three and a half months before sentencing.
Martha Stewart – American business mogul with capital ventures in broadcasting, merchandising, and publishing. She was convicted in 2004 of lying to investigators concerning the sale of her shares of ImClone Systems stock – a transaction which resulted in her successful avoidance of a financial loss of over $45,000. Supposedly she had been given inside information on this particular stock’s devaluation set for the very next day.
Ms. Stewart was incarcerated for five months, with a subsequent status of serving a two-year term of supervised release. Five of the 24 months were stipulated as strict in-home confinement and electronic monitoring through a GPS device worn around her ankle. There were other conditions for her early release including remaining employed and not associating with people who had criminal records. Ms. Stewart served her in-home confinement at her home in Bedford, New York. Her other residence, located in Seal Harbor, Maine is the former estate of Edsel Ford. Two years after her release from prison, her net worth was estimated at US$638 million.
Richard S. Fuld, Jr. – Most widely known as the Chairman and Chief Executive officer of Lehman Brothers, a publicly held financial services firm and primary dealer in the US Treasury securities market. Lehman Brothers declared bankruptcy in 2008 after creating worldwide investment financial instability through questionable accounting practices.
Transferring the deed of his Florida mansion to his wife for $100 in 2008, Mr. Fuld sought to protect this residence from potential legal actions. He had purchased it in 2004 for over US$13.5 million. After joining a New York-based hedge fund group, Matrix Advisors in 2009; by early May, 2010, he was listed as a registered employee of Legend Securities.
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