Does this taste funny to you?

[Ben] Edelman had little to gain here. He’s a very well-paid professor and consultant; $4 is not particularly significant to him. It certainly isn’t worth the time Edelman spent in trying to obtain it. Edelman’s time is extremely valuable, to the tune of at least $800/hr, according to Bloomberg Businessweek. Spending any more than about two minutes on this refund makes this a losing proposition for Edelman. But he has made a career of examining predatory practices places like Facebook and in the airline industry. He probably believes sincerely that fraud in all forms should not be tolerated, and that as he goes about his life, he should use the full muscle of his education, experience, and privilege to set things right, so that other people are not taken advantage of.

A New Republic writer defends Harvard’s terror emailer, and in so doing provides a fascinating window onto postmodern American culture.

It would never occur to this writer that anyone demanding eight hundred dollars an hour – at least eight hundred dollars an hour – as a consultancy fee — over and above his Harvard salary — is pretty disgusting long before he begins intimidating local merchants who make him lose four dollars. Obscene levels of personal greed (“[W]e don’t say very much about greed, not comfortably at least. Perhaps that is the inevitable price of an economic system that relies on the vigor of self-interested pursuits, that it instills a kind of moral quietism in the face of avarice, for whether out of a desire to appear non-judgmental or for reasons of moral expediency, unless some action verges on the criminal, we hesitate to call it greed, much less evidence of someone greedy.”) are incredibly socially destructive.

But no – we should admire this man because he is, writes the New Republic guy, “a roving pro bono consumer protection unit.”

What a generous soul! This selfless guardian of the just distribution of wealth sets aside email time to harass restaurants that overcharge him by a pittance. All Hail Edelman.

O tempura! O moray!

Ben Edelman, Harvard’s terror-emailer – and the very embodiment of this blog’s signature category BEWARE THE B-SCHOOL BOYS – turns out to be a serial threatener of small businesses.

Four years ago, when a sushi restaurant wouldn’t honor his Groupon vouchers, he did it again, threatening to go after their license, etc., etc., etc., etc.

This time, though, the restaurant called his bluff, wished him luck with his complaints to the authorities, and told him that if he ever got near the place they’d call the police.


Naturally, we’re all wondering what’s next. Will Korean Korners release a 2010 email exchange in which, in response to having been charged twenty-five cents for a second trip to the jasmine tea dispenser, Edelman promises to “take this right to the top, to my good friend, Harvard colleague, and current head of the Consumer Protection Agency, Elizabeth Warren”?

I would be okay with everyone bashing Ben Edelman…

if I weren’t also dreading the inevitable cutesie denouement of this brand of story: The icky Harvard professor will suddenly radically un-ick himself and become best friends forever with the Chinese restaurant guy, and we will have to endure the two of them dragging their forgiveness and reconciliation act all over the media.


Okay, two limericks so far. One from a reader:

What a marvelous prof is Ben Edelman
His check was four more and it’s fatal, man
He’ll spew legalese
O’er this bill for Chinese
Ben’s too hungry to pay like a gentleman

And one from yours truly.

Few acts are more certainly fatal than
Arousing the wrath of Ben Edelman.
Everything jerks him
But nobody irks him
As much as a chef with a ladle can.


See? See? This is what I mean!

In an apology posted Wednesday afternoon on his Web site, Edelman wrote: “Having reflected on my interaction with Ran, including what I said and how I said it, it’s clear that I was very much out of line. I aspire to act with great respect and humility in dealing with others, no matter what the situation. Clearly I failed to do so. I am sorry, and I intend to do better in the future.”

Edelman, who is an attorney in addition to a professor, said that he’s reached out to Duan and plans to personally apologize to him.

Grr. Brace yourself not only for their joint Oprah appearance, but for their decision to open a restaurant together with some goddamn cutesie name like …


“Since 1997 Mr. Rorke has been on the faculty of Columbia University’s Graduate School of Business. He received his undergraduate degree from Brown University and an M.B.A. from Harvard Business School.”

UD ain’t sayin’ they don’t look good. They look good!

This one graduated from a school on whose board of trustees sits no less a financial figure than Steven Cohen, and whose last president, in her role as Goldman Sachs trustee, approved a nine million dollar bonus one year for Lloyd Blankfein. And of course he’s been a professor since 1997 at Columbia University business school, whose dean is both a film star and a fan of Countrywide Financial Corp.

Gregory Rorke has definitely got the pedigree.

But what does UD always tell you? What does she tell you so often that it’s one of this blog’s most-used categories?

Sing it with me: BEWARE THE B-SCHOOL BOYS.

Scroll down here for Rorke’s long-form bio from his participation in a Columbia University conference titled Out of the Storm But Not Out of the Woods

Though given Rorke’s arrest for “bilking investors including a former student out of $3 million” (Including a former student! What good are students if they can’t be stooges? Talk about sitting ducks. They’re literally sitting there in your classroom being sitting ducks!) for him it currently looks more like Inside the Storm and Deep Into Preet’s Woods…

This would be Preet Bharara, scourge of Wall Street. “Columbia decline[d] to comment on Rorke’s arrest.” They’re taking the MIT route. Who? Bitr… How do you spell that? Thirty-five years on the faculty? Dean? What the hell are you talking about?


Did Rorke study creative writing at Brown?

[O]n November 28, 2012, after receiving multiple complaints from Navagate investors demanding repayment and/or threatening to sue RORKE, RORKE forwarded an email purporting to be from a representative of Hong Kong Shanghai Bank Corporation (“HSBC”), which falsely stated that HSBC had just signed a multimillion-dollar contract with Navagate when, in truth and in fact, the email appears to have been a complete fabrication.

November 2012… mere months after sharing his thoughts on “the emerging lucrative exit opportunities and the challenges that the private equity and venture capital industries are facing ahead” [Bit redundant there, says Scathing Online Schoolmarm. If they’re emerging, then they’re ahead…], Rorke was desperately penning good news from Shanghai…



“Bitran’s misdeeds were made public as early as 2009, yet he stayed on Sloan’s faculty until 2013.”

That’s what I’m talkin’ about.

Sloan’s decision to keep Bitran for years after [a 2009 news story about his Madoff connection], and eight months after he agreed to pay the SEC some $4.8 million, suggests the school did not think the transgressions warranted stronger action against him.

Yeah. Well. What can MIT say? If it were honest it would say Man if we bumped every b-school boy doing a doo-doo on the SEC, we’d have to declare bankruptcy…

‘“MIT does not comment on pending criminal proceedings involving members of the MIT community,” Paul Denning, [an MIT spokesperson] said in an e-mail.’

And why, you might ask, not? Here’s one of your deans, a man who taught at your business school for decades, and you have nothing to say?

The former deputy dean of MIT’s business school and his son agreed to plead guilty Tuesday to operating a $500 million hedge fund scam.

Gabriel Bitran, 69, who taught at MIT for 35 years and served as deputy dean at the Sloan School of Business for five, allegedly lied to clients about the return on investments his hedge fund GMB Capital Partners was delivering.

He’ll probably go to prison for five years. He kissed the ass of Bernard Madoff (that’s how the SEC discovered his scam). He lied and tried to hide funds when the SEC started being interested. He skimmed millions off of his scammed money for himself.

He’s a dumbfuck too, having admitted in a series of emails to his son/partner in crime exactly what he was doing every step of the way.

This guy did incalculable damage to many people, and one of our highest-profile, most-esteemed universities harbored and esteemed him for over a generation. Gave him cover. Gave him respectability.

But eh we don’t wanna say nothing, man… It’s … pending! We don’t do pending…

But they were found guilty. What’s pending? You’re waiting a decent interval to see how many years he gets?

Way back in 2012 – when Bitran was barred from the securities industry and had to pay a massive fine to the SEC – MIT did the same thing: “It has nothing to do with the school.”

UD gets that universities dread being tainted by the crooks they hire and promote. But with something this high-profile, you simply have to acknowledge it and regret it and all of that. Otherwise you leave people wondering why your school retained a highly praised and highly compensated Ponzi schemer in its school of business.

Take a look at Yeshiva University – look at how well it’s doing with alumni giving and credit ratings and all of that in the wake of its decision to pretend that Bernard Madoff and Ezra Merkin had nothing to do with the school.

Update on the Ultimate University Simulacrum.

[My high-powered panel on business ethics] discussed at great length how an ethical culture had to come from the top, how ethics had, according to some panelists, grown rapidly in importance in business. And, indeed, how the most ethical companies are the most profitable.

But as we lurch from one corporate scandal to the next, surely it’s clear that, while big companies are creating more and more glossy brochures on corporate responsibility, the temptation to cut corners skews behaviour as much as it ever did. From alleged corruption in China by GSK and Rio Tinto to BP’s rig and refinery disasters, to the price fixing, sanctions busting, mis-selling and foolish lending of bonus-fuelled bankers, it seems all that changes is the scale of the wrongdoing.

What was most telling was how both academics [on the panel] admitted the lowly status the subject of ethics held within the MBA courses teaching the next generation of big business leaders. One confessed his pupils were rarely interested in the subject and that it barely merited a mention on the syllabus; the other told of how the great Lord Kalms – founder of Dixons – had bequeathed a large sum to the London Business School for a chair of business ethics at London Business School. Where is that position now? Sadly, quietly dropped.

More glossy brochures, more glossy courses. Looking good.

“A member of the Finance faculty said openly: ‘If we teach a course in business ethics, then it will only show that what I am teaching is unethical.'”

Honesty is such a lonely word!
Everyone is so untrue!

But not this guy, this Harvard finance professor who honestly complained to Amitai Etzioni that if Etzioni was going to be so … unseemly as to teach business ethics at Harvard, this guy would be outed as teaching his students to be greedy amoral sons of bitches…

Oh but no! Don’t put yourself down! Business schools aren’t teaching people to be amoral and greedy! In fact, business schools graduate people just like you and me. God knows where the excesses in the business world come from:

Thomas Donaldson …thinks that “the ‘greed’ explanation for Wall Street excesses” is “unhelpful.” He says, “I want to believe it too, but no serious study has shown that greed is higher on Wall Street than in other industries, or for that matter higher in any one industry than in another, or in any time period than in another. Greed no doubt varies by time and place, but it is notoriously hard to measure and is a persistent feature of the human condition.”

So complex, so persistent a feature of the human condition … forget it! If it’s ever occurred to anyone to wonder whether insisting on a sixty-seven million dollar bonus for a year spent undermining Americans’ faith in capital markets is greedy, forget it! Point One, every single one of us, under the same circumstances, would do it, because we’re all exactly like Mr Everyman Blankfein. Point Two, whether our industry is hedge fund or Red Cross, no serious study shows that any of our pursuits is less about the personal accumulation of huge amounts of money than any other.

In a way, it’s kind of wonderful. Under our differences, we’re all the same. We’re all greedy amoral sons of bitches.

So you can’t accuse b-schools of teaching greed, because it can’t be taught. Greed is Us. Indeed we should thank b-schools for saving civilization, because they’re teaching people to sublimate and channel their greed. Instead of killing their relatives for their life insurance money, Goldman Sachs employees have learned how to drive a “highly sophisticated engine for converting the useful, deployed wealth of society into the least useful, most wasteful and insoluble substance on Earth — pure profit for rich individuals.”


UD thanks Daniel.

“In his bid for leniency, Martoma mentions his 1999 expulsion from Harvard Law School for faking a transcript of his grades, arguing that he has been ‘punished enough’ by having the episode publicized at his trial.”

Oh honey. Why not tell the judge the whole story of your grade faking? If the judge knows everything, leniency will be that much more lenient. So let’s see. Here are the details:

In late 1998, [Mathew] Martoma, a graduate of Duke, altered the transcript of his first-year law school grades: He gave himself A’s in Civil Procedure, Contracts, and Criminal Law, rather than the B, B+, and B he’d earned, according to a Harvard Administrative Board report. He applied for clerkships with 23 judges using the altered transcripts. Weeks later, someone in the school’s registrar’s office discovered that the transcript had been changed. Martoma then withdrew the clerkship applications and told Harvard that the doctored transcripts had been sent out by mistake.

In a classic example of how the coverup is usually worse than the crime, Martoma appealed his dismissal from Harvard by arguing that he’d withdrawn the applications before he was caught and that the improper transcripts had been submitted accidentally. His efforts apparently involved creating a fake computer data forensics company, complete with a professional-looking marketing flyer, to corroborate the time stamps of his e-mails.

You didn’t just change a few grades! You created a whole fake company! You’ve got like seven aliases! You’re a real criminal, and because of your insider trading trial everyone knows it, and the fact of everyone knowing is a real source of suffering for you.

You see the same grounds for leniency in mafia trials in southern Italy. Yes, your honor, I’m a career piece of shit, but until now with omertà and all no one said it out loud. Show some mercy.

Capitalist Cosmic Convergence

Danny Kuo, who pleaded guilty in 2012 to swapping illegal stock tips, asked a judge on Tuesday to delay his sentencing so he can attend next month’s commencement ceremony at the University of Southern California’s Marshall School of Business and receive his MBA.

“The former Goldman Sachs trader had been slated to teach an undergraduate honors economics course beginning later this month—despite having been found guilty of defrauding investors.”

UD‘s own University of Chicago seems to have decided that Fabrice Tourre — America’s current poster boy for defrauding investors and failing to get away with it — will not after all teach its undergraduates how money works. The U of C has clearly been hemming and hawing about this decision for some time, and UD can imagine how that went.

Well, he’s a bright articulate young man with many years of malfeasance in front of him… Yes, and he’s currently unemployed and needs a job and we can provide one… But on the other hand what if all his students cheat and then explain to the administration that he cheats so why can’t they… Plus can’t you already see the Sunday New York Times Magazine feature Dropping in On Fabulous Fabrice’s University of Chicago Seminar

“Ethics education is carried out at the workplace. Forget the classroom.”

Uh-oh. So what do we do with the growing battalion of business ethics professors battering their incorruptibility into the stubbornly corrupt hearts of MBA students? Batter my heart, twelve-person’d ethics faculty, as John Donne might put it; yet if Annabel Beerel (the kind of name Vladimir Nabokov would have loved – it’s like a word game involving coming up with a name using the smallest number of letters) is right –

Most MBAs have their sights on gargantuan salaries and huge share options. Any discussion regarding excess CEO pay, for example, even when the company has clearly lost significant market value over a sustained period, is typically shrugged off with, “Well whatever is legal is OK.”

– and that’s only one of many points Beerel makes on the way to arguing that – as her headline has it – ETHICS TRAINING DOESN’T WORK.

Franchement, UD thinks she must be right, given all the battered by morally superior forces Wharton and Harvard MBAs out there insider trading and all.

But, with America’s large number of exquisitely, expensively educated white-collar crooks in mind, which business school will dare announce We’re firing our Force for Good and doing what UD‘s been, for years, saying we should do. We’re starting a speakers series featuring jailed miscreants who might scare at least a few of our students straight. I don’t see this happening. Amid the current crime-spree, B-Schools are compelled to look as though they’re doing something.

Know Your Oligarchs

What with Tom Perkins and the rest worrying about a populist uprising against America’s oligarchs or plutocrats or whatever, UD thought she might do a service by featuring particular people among this otherwise undifferentiated and therefore easy to stereotype mass.

Today’s guy is F. Perkins Hixon. “Perk,” as he’s known, grew up in Tennessee.

As a boy in Tennessee, F. Perkins Hixon said he “grew up listening to recordings of Maria Callas.” So after he moved to New York, he subscribed to box seats at the Metropolitan Opera, gradually upgrading to the top class, a parterre center box of eight seats, at more than $16,400 a season.

But love of opera was only part of the reason for subscribing, said Mr. Hixon, a senior managing director at Evercore Partners, an investment banking and strategic advisory firm. Even the ability to entertain far-flung friends was not the deciding factor.

The real issue was legroom. The chairs in a Met box, unlike the regular tiered seats, can be moved around.

“I’m six-foot-seven,” Mr. Hixon explained. “An opera lasts three to four hours, so if you don’t fit into your seat, it’s not very comfortable.”

Perk has trouble recognizing his own father.

[Last year, Evercore, the investment firm for which Hixon worked] received alerts from the Financial Industry Regulatory Authority, an industry regulator, and the company confronted Mr. Hixon about trading in accounts belonging to [his ex-girlfriend] and his father, according to the SEC.

At the time, Mr. Hixon said he didn’t know either of them, according to the SEC complaint.

“When confronted by Evercore with the fact that he claimed not to know his father, Hixon Jr. said that although he saw ‘Frank P. Hixon of Duluth, Georgia’ on the list and recognized him as having the same name as his father, he did not identify him to Evercore as someone he knew because ‘Hixon’ is a common name in the South and his father did not live in Duluth,” the SEC complaint said.

Perk, a Harvard MBA, is currently out of work.

Mr. Hixon, 56, was arrested in Manhattan on Friday morning by agents of the Federal Bureau of Investigation and charged with seven counts of securities fraud and one count of making false statements.


Only 33, and already so adept at fudging conflict of interest for his own gain!

Well, you’d expect such a wunderkind on the faculty of Harvard Business School.

And it just goes to show the strides universities like Harvard – which has had you don’t wanna know from conflict of interest scandals! – have made in dealing with the problem. Really getting the message down to younger faculty.


OTOH: This guy’s mom must be so proud! Look what sonny boy did! Still a pisher and he wrote something and the stock in that company just fell like a rock!


All UD can say is: When your models at Harvard are COI giants like Andrei Shleifer and Joseph Biederman (search their names if you dare), the sky’s the limit.


Oh, one more thing UD can say – and she always says it: Beware Beware Beware the B-School Boys.

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