A Current Event

This article is about a more recent ethical dilemma that has come to light. On Jan. 21st the SEC three New York investment firms for false representation. The CFO and a few other members of top management were moving money around within the company to create an account with $8.5 million in it that was not used for approved purpose by the firm, they also attracted investors with false positive returns and hiding fraudulent loans. My question that I have from this article is that unethical behavior has been a hot topic in the news since Enron and more and more people have been caught and prosecuted for unethical behavior so why are these executives still engaging in this behavior?

Scott

http://www.businessinsider.com/ny-investment-firms-slammed-for-false-representation-2011-1

Robert Moffat: IBM Insider Trading

Robert Moffat was IBM's senior vice president for technology who recently pleaded guilty and was sentenced to six months in jail for insider trading. This article covers various aspects of his life, how he became involved with Danielle Chiesi, a consultant at New Castle Funds and how that ultimately led to his downfall. According to the article Moffat would be the last person anyone expected to be caught up in a scandal, let alone a crime. He had a lot of money, a great family and was considered to be a candidate to succeed Samuel Palmisano, IBM's CEO. His main attributes were loyalty, inhuman work habits, and the mental bandwidth of an orchestra conductor. It is ironic that everyone describes Moffat as a very loyal and trusted individual when in reality he did just the opposite to both IBM ( he had worked at IBM for over 30 years) and his family. He was also always considered very intelligent, Moffat was able to develop many ingenious systems for IBM's operations. The first question that comes to mind is how does such a loyal and intelligent man get involved in this? Although he presented many leadership qualities, what leadership qualities is he lacking? Please share your comments on this case.

Thank you,

Liz Ramirez


http://money.cnn.com/2010/07/06/news/companies/ibm_insider_trading.fortune/





 

What Happened to Lou Pai?

I know a lot of us have had to watch the film "Enron, The Smartest Guys in the Room" throughout our college careers at Illinois State University. Every time I watch this film, either in class or in my spare time, I am always wondering the same thing at the end.  I wonder what ever happened to Lou Pai? I plan to research this further, but at the moment I would like to turn all followers of this blog's attention to an article written by Madeleine Brand titled, "Lou Pai, Enron's Elusive Mystery Man." In the article, Madeleine discusses some of the things that drove Lou Pai to his leadership position.  The main argument for his rise was his intelligence.  Ultimately, the article states that he built Enron with his market model for the deregulation of gas.

However, some of his personality traits and the things he did were not consistent with the qualities and expectations of a leader.  The article states that he was very quiet, failing to even make eye contact or speak to others in the elevators. How might he have become a leader at Enron when extraversion is seen as the most prevalent personality trait in leaders?   He also consistently went to strip clubs, which could deteriorate the image of the company. Were the multiple stakeholder groups of the company aware of his personal leisure activities?

I will continue to explore the whereabouts of Lou Pai in this blog. I am very interested to see if his "leadership" traits have been applied to his current lifestyle practices.

Below I have posted a link to the article in question.

http://www.npr.org/templates/story/story.php?storyId=5411422

Thanks,
Justin Fisher

J.P. Morgan Reputation

http://online.wsj.com/article/SB10001424052748703652104576122300990479090.html?mod=WSJ_business_whatsNews

My blog post relates to this article titled "Trustee: J.P. Morgan Abetted Madoff" by Michael Rothfeld.  My question is what would drive leaders and management teams at one of the most successful corporations in the financial services to involve themselves with a scandal like this?  This is a company that one would go to for investing and personal banking, but this is a serious blow to the companies judgement as well as reputation.  Please share you opinions.
Thanks,
Dan Condon