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… feature endemic cheating. Big deal. If someone says of Brown University’s highest-profile trustee that “you have to wonder whether his returns have been generated not only through his trading brilliance but also through a culture of cutting corners and pushing employees to the point where they break the law,” you’re not exactly going to pee your pants.

If someone says of his investors that

There is a point where willful blindness turns to complicity. Investors profit from any added juice that SAC might gain, whatever its source. And if Mr. Cohen were to face charges, they would pay no price.

Major banks and investors around the world shoveled money to Bernard L. Madoff despite doubts about his purity. Some thought that Mr. Madoff was using his brokerage firm to front-run. In other words, they thought he was cheating on their behalf, not ripping them off. And that was an enticement.

you’re not going to get all amazed that the writer cites Bernard Madoff – a Yeshiva University trustee – right after talking about Brown University’s highest-profile trustee.

Still – Brown itself, especially given this background and this background, might want to start reviewing its relationship with Steven Cohen. So far, the university won’t even comment to the Brown Daily Herald about the situation. Most unwise.

Scathing Online Schoolmarm realizes how difficult it is to fashion a statement under these circumstances. Cohen is in a position to give the university not millions, but billions. OTOH, some people and institutions are beginning to pull their money out of SAC Capital Advisors, because there’s too much noise in the press about insider trading, and the possibility of the SEC actually collaring Cohen. What to do?

Brown could of course ask Cohen to leave the board of trustees. No one in the money world cares about this sort of thing, so it wouldn’t hurt SAC. Or Brown could issue something like this:

We are aware of the insider trading allegations against some SAC employees. We also believe that SAC continues to have among the highest standards for compliance in the industry. Steven Cohen remains a great asset to Brown.

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