See now here’s a whole article about how exceptionally morally reflective Mathew Martoma was in college and graduate school.

One of his friends calls him “very smart and ethical,” and wonders: “Did the situation and SAC push him over the edge?”

Brown University’s highest-profile trustee, Steven Cohen, does run a strikingly … aggressive hedge fund, but if you allow people to blame Martoma’s insider trading indictment (he’s accused of the most lucrative insider trading in history) on his environment, you’re allowing them to blame the bad behavior of everyone (and everyone here means everyone from a less wonderful, less gloriously privileged environment than Martoma’s, which is to say everyone) on their environment. If you blame Martoma’s downfall on the misfortune of his having been hired by the most powerful, prestigious hedge fund in the world, I mean boooohoooo. Fuggedaboutit.

This guy isn’t your average impressionable morally middling guy. He’s described by lots of people as keenly knowledgeable and sensitive in the moral realm. There’s Dr. Rieux over there risking his life every day to save Oran from the plague, presiding stoically at the bedside of a child dying in appalling agony; and here’s Martoma bringing to that novel acute insights on the capacity of human beings to empathize with and sacrifice for one another. How can a guy able to reason about morality at that level cheat and steal like a son of a bitch?


Er, is this really a problem for you? Do you really think there’s a puzzle to work out here? Have you read Dr. Faustus, Notes from Underground, Hamlet, or almost any serious work of literature?


We can go back and forth, and I’m happy to go back and forth, about the utility of ethics courses in business school. Say we appoint David Petraeus to lecture in such courses, along with other people we think of as moral paragons. If we’re lucky, the focus of his lectures will be the very complex vulnerabilities and blindnesses and compulsions that lie within all of us.

Not that understanding this, even on a very high level, will tend to make you, personally, more ethical. Ask Michael Martoma, and many other insider traders who share his excellent upbringing, his excellent education, and his exquisite moral reasoning, about that. If anything, the staggering good fortune these people have enjoyed all their lives, their easy entry into elite settings, their great wealth, even their great intellect, tends to make them feel removed from the common suffering humanity that Dr. Rieux found so compelling. These days, Americans are wealthy in ways unimaginable in the past. Steve Cohen’s personal fortune is close to ten billion dollars, and Michael Martoma moved very much in Steve Cohen’s world. The power, and the almost absolute removal from common human life, this sort of wealth — or a life lusting after this sort of wealth — yields, has — obviously — for many people — disastrous moral consequences. No business school is going to talk honestly about this, because no business school wants to be in the business of saying Come to study here, and we’ll teach you all about limits.

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7 Responses to ““No one … contributed more to our class discussions of Sissela Bok’s `Lying,’ nor was anyone in our class as acute on the issues of moral capacity raised by Camus’ `The Plague.”‘”

  1. adam Says:

    All of the above applies to Dr. Gilman – he enjoyed a stellar progression and academic promotions from Harvard to Columbia to the chair of neurology at The University of Michigan; he enjoyed trusted and privileged access to confidential information; he basked in his reputation as a respected role model for aspiring academic physicians. He knows about ethical codes and professional boundaries. When did his ethical compass begin to fail, and why? Like Martoma, he didn’t cross the line because of his environment.

  2. Margaret Soltan Says:

    adam: Now that he’s been quietly allowed to retire, and now that he’s cooperating with the SEC, I doubt we’ll ever have the pleasure of hearing this man’s excuses. But if I had to guess, I’d say it would go like this:

    Mathew was a son to me. In him, I saw my young self, full of life and a desire to make the world a better place. I now see that he cleverly played on an old man’s weakness in order to get information out of me…

    At least I think this is Gilman’s best play. But I don’t think he’ll have to use it.

  3. david foster Says:

    Is the successful pursuit of wealth inherently more corrupting than the successful pursuit of political power? Personally, I’d be even more concerned about the ethical character of aspiring politicians and senior government officials than about the ethical character of aspiring hedge fund managers…not to in any way trivialize the latter, but the potential damage that can be done by those in the first category is even greater than that than can be done by those in the second.

    You mentioned Dr Faustus….here’s a post I wrote a couple of years ago about the theme of Ambition in Goethe’s Faust:

  4. MattF Says:

    Well, we’ve all heard that ‘virtue is its own reward’ but I’m guessing that, in these various ethics classes, no one points out the obvious but unpleasant corollary to that assertion.

  5. Van L. Hayhow Says:

    Wow. A non-prosecution agreement with the feds. Hard to do. He must have some explosive stuff. Now, how will the feds get the jury to believe it without charging the doctor with something. We’ll see, but if the feds pull this off, the jail sentence will be astonishing.

  6. Margaret Soltan Says:

    Van: I didn’t know these things were that rare. Will Martoma’s lawyers claim that Gilman’s age makes his memory iffy, etc?

  7. University Diaries » Another chapter in the legend of SAE. Says:

    […] seriousness/massive theft of funds approach to life. Michael Martoma, you may recall, was also an ethics guy in college… Bernard Madoff, come to that, was a pious Yeshiva University […]

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