Will Brown University’s Highest-Profile Trustee Be the Next One to Go to Jail, Now That…

… yet another of his employees (the career fraudster Michael Martoma) has been found guilty of insider trading? That’s the question on everyone’s mind.

“From a public perception, how do you go after all of the subordinates, but stop before getting to the guy on top,” asks trial lawyer Thomas Rohback, a partner and chairman of the litigation group at Axinn, Veltrop & Harkrider. “If somebody is a billionaire, and you’re sending other people that have worked for him to prison, isn’t there something lacking if you don’t bring the possibility of a jail sentence against that person,” continues Rohback.

… Under Dodd-Frank, the statue of limitations for financial crimes was extended to six years, from five previously, meaning Bharara and his team still have time to bring criminal charges against Cohen.

Board of trustees meetings at Brown must be awfully… awkward lately…

“So Steve any inside scoops on potential donors for the new arts center? …Ahem! … I mean… haha! … Any ideas…?”

Brown just can’t let him go yet. His fellow trustees sit across from him at that big ol’ conference table and whenever they look at him, whenever he opens his mouth, they’re all thinking the same thing:

NINE FUCKING BILLION DOLLAR PERSONAL FORTUNE! F-U-U-U-CK…

It’s just too much. They’ll hold onto him because they figure he will never go to jail because they figure there MUST be a law in the United States that says something like once you’re worth seven or more billion dollars you cannot be jailed because your legal status is no longer person. Something like that. You’re like a Gross National Product. Your legal status has actually changed and you’re actually too rich to go to prison. It’s like at some point you’re too rich to die. What’s that line from White Noise?… Babette says, of the very rich: “I have trouble imagining death at that income level.” It’s like – if Madoff hadn’t had to give it all back, he’d have been too rich to go to prison… Yeah, good ol’ Steve! He won’t go to jail. And if we hold onto him some day he’ll give Brown say one billion say…

The Brown University Observer

Like the New York Observer newspaper, Brown University must by now be well-practiced in observing its highest-profile trustee, Steven Cohen, as he tries to avoid going to jail.

… Nick Verbitsky, the director of To Catch a Trader, told [the New York Observer] that the FBI has confirmed they are looking at three other stock trades that Mr. Cohen could personally be charged on.

Yes, it’s quite the cat-and-trustee game. Keep your eye peeled, Brown.

Bravo, Brown.

Students there aren’t letting Trustee Steve settle into a non-story as the school year begins. They’re perfectly aware that Hedgie Houdini’s continued trusteeship of their university is a scandal, a disgrace, a major blot on the school. Throw in Bruonians Richard Lee and Steven Rattner and Brown begins to look like Wharton, which, as you know, this blog has long called Forcing Ground of the Great Insiders. (Wharton also proudly claims future United States of America and current Trump University President Donald Trump. )

I mean, when your university’s last president, “a member of Goldman Sachs’s compensation committee…approved a $67.9 million bonus, still a Wall Street record, for Chairman and Chief Executive Officer Lloyd Blankfein,” you should probably watch yourself. With this latest business, the Steven Cohen business, Brown’s building a really scummy critical mass for itself. Only its students, apparently, are willing to bring any moral seriousness to the problem.

It’s an exciting time to be a Brown University trustee!

Whether Cohen will ultimately face criminal charges, Frenkel said to “look at the example” of Rajat Gupta, the former Goldman Sachs director charged in the insider trading investigation of Raj Rajaratnam’s Galleon Group. “The SEC brought an administrative action against Gupta,” Frenkel recalled, “and within 30 days, the next thing you know, there’s a criminal indictment.”

Will our highest-profile trustee, Steven Cohen, get hit with criminal, and not just administrative actions? Stay tuned!

Socially conscious Brown University has a problem.

Its richest, highest-profile trustee, Steven Cohen, has just been sued by the SEC for failure to respond to insider trading at his hedge fund. Despite the personal fortune of nine or so billion dollars on which Cohen can draw in his defense, chances are good that he will be banned from the securities industry.

Brown has already had to deal, recently, with a crooked trustee. Brown’s last president notoriously signed off on Lloyd Blankfein’s 2007 Goldman Sachs bonus of $68 million.

Does Brown wish to be a laughingstock? The sort of place fronted by people full of high-minded rhetoric about the social good, and run by people whose greed – and collusion in greed – knows no bounds?

How long will Steven Cohen continue to be a Brown University trustee?

Big news for Brown University.

Their highest-profile trustee, Steven Cohen, has just been implicated in the same insider scheme I write about directly below.

Way to go, Brown! You played the angles, knowing that “[a]uthorities have investigated [Cohen] for insider trading without success for years…” You figured Eh keep him on he’s worth billions to Brown and maybe they’ll never catch up with him… You played the angles and now…

Well, now you’ve lost.

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UD thanks Roy.

PIKE’s Pique

Four score and seven years ago, I joined my beloved PIKE fraternity…

If you don’t find this oratory profoundly bowel-moving, you are no lover of freedom.

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UD thanks Ani for the link to the video. (Watch the second video on the page for the full monty.)

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Update: Reviews are beginning to chug in. This one notices something UD hadn’t picked up: “At one point, [the lawyer] says that the inaccurate story has spread across the entire ‘United Nations.'”

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Gawker‘s review here.

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UD has noted that the president of the University of Tennessee has held his tongue about this so far. But when the whole world is laughing at your university because it has devolved into very low farce, I think you have to come out and say something.

Backtracking at Brown

Until recently, the University’s directory listed Villarreal as an administrator in the Division of Biology and Medicine. In an email to The [Brown University] Herald, Mark Nickel, Brown’s interim director of news and communications, called the listing”a professional and collegial courtesy” during Villarreal’s training at Rhode Island hospital. Villarreal was not an administrator

Brown’s corporate denialist explains that a Brown administrator was not an administrator… That, you know, Brown writes these things in its web pages out of courtesy…

There’s no setting more courteous than your university’s medical school. Courtesy listings which call people administrators when they’re not administrators, and – more commonly – professors when they’re not professors. Courtesy (aka guest) authorships on research papers. Courtesy visits from pharma reps…

I declare, it’s like the first five minutes of Gone With the Wind over there! Everybody dressed in crinoline and bowing and scraping and extending courtesies left and right…

When reality bumps up against these exquisite poses, it’s always unpleasant. Robert Villareal, recent undergrad and medical school student at Brown, has already organized an impressive criminal drug distribution network.

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And speaking of backtracking, Brown has also been having second thoughts about one of its more idiotic money-making ideas: interest-rate swaps. As one financial advisor comments:

“The basic assumptions were wrong… Under ideal circumstance they could have worked out, but what are the chances when you have a 30-year deal that everything would go exactly as predicted?”

Brown has unloaded, at a cost of five million dollars, one of the swaps; there are two others which will cost them twenty million to unload. Two of the three swaps are with Goldman Sachs, on whose board Brown’s president sat for ten years. Reporters want to talk to her, and to Goldman, about that connection, but

Michael DuVally, a spokesman for Goldman Sachs, declined to comment.

Ruth Simmons, Brown’s president since 2001, resigned from the Goldman Sachs board in February 2010 after 10 years. Calls seeking comment from her spokeswoman, Marisa Quinn, weren’t returned.

Brown wants to …

… mike your bat.

As Goldman Sachs is …

subpoenaed, Brown University students should think about their president’s contributions to this outcome.

Last year, UD‘s friend Roy Poses looked at the big picture.

Aaaaawkward.

“[T]o progress to a point where the damage to the university is greater than the assets the person brings, [Stephen] Nelson said an investigation must reach ‘some threshold where enough people are sufficiently concerned.’ But that threshold is difficult to discern.

… Nelson said when a person has “a blackened or otherwise impaired public persona,” it may come time for the person to withdraw from the board in order to maintain a university’s reputation.

Brown University’s newspaper worries that its scandal-rich leadership is beginning to be a bit of a bother.

Code Brown

The Mephitic Factor is getting out of hand on the Corporation of Brown University.

When you mob a university’s boardroom with the mega-rich, you expect, especially from some of the financial biggies on it, a bit of bouncy-bouncy morality-wise. Yes, there’s a whiff of fraud here, a rumor of rule-breaking there, lawsuits trailing like wisteria everywhere… Big deal. Ruth Simmons, president of Brown, sits on the university corporation board, and we all recall her remarkably destructive activity on the compensation board of Goldman Sachs. The president of the university sets the moral tone, so okay…

But now we’re talking straightforward, high-profile illegality. Brown University board member Steven Rattner is described by New York’s attorney general as “a central player in the criminal conspiracy to use bribes and kickbacks to get $150 million in state pensions that he could invest through his company Quadrangle.”

Code Brown, as the doctors say. Things are really beginning to stink.

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UD thanks Roy for the link to the Brown Daily Herald.

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