Yikes. Brown University couldn’t have that. Student input on Corporation membership would almost certainly have vetoed Steven Cohen and Steven Rattner.

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UD thanks Roy.

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.

… trustee Steven A. Cohen – featured an exhibit titled: Move Along, Nothing to See Here.

What Brown University is currently exhibiting – institutional indifference to the university’s continued association with le très malsain M. Cohen – is a show of the same name: Nothing to see here. Steve’s our guy, SEC be damned.

It’s been months now that we’ve known Cohen’s scandalous firm to be insider trading central; but, well, as a commenter on the latest Brown Daily Herald article writes:

Why would it affect Cohen’s [trustee] status? Steve Rattner gave the family weekend speech in 2012 after being charged in a pay for play scheme by the SEC, and paying huge fines.

Trustee Steve the First! Gone but not forgotten (scroll down). As to the Second: UD understands a university pausing for a very long moment before breaking up with a guy who makes nine hundred million dollars a year in salary. A guy with a personal fortune of around ten billion dollars. UD‘s heart goes out to Brown at this difficult time. Brown must work out a complex moral calculus: Filthy lucre vs. a shred of ethical integrity.

Stay tuned.

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As always, UD thanks Roy.

…headlines the Brown University newspaper which, while it’s at it, reminds readers that this is really a kind of beat-goes-on story for Brown’s, uh, very interesting board of trustees:

[Steven] Cohen is not the first Corporation member to come under investigation for potentially unethical financial dealings. Former Corporation fellow Steven Rattner ’74 P’10 P’13 P’15, a former Herald editor-in-chief, was barred from the securities industry for two years in November 2010 as part of a settlement after his private investment firm, Quadrangle Group, was scrutinized for a pay-to-play pension fund scheme.

See but that one’s former… This one is like get on your pony and ride! Ride your pony! Stay in the saddle! Don’t issue any statements… Just sit there and pray Cohen dodges yet another bullet from the SEC…

Meanwhile, if I were a Brown student, I’d take a look at the rest of the trustees. If the university is comfortable with Cohen, there’s no telling what else you’re going to find, is there?

A former portfolio manager at Steve Cohen’s $14 billion hedge fund told the FBI that he gave his boss tips based on inside information.

Bloomberg Business Week updates us on Brown University trustee Steve Cohen, truly The Most Interesting Man in the World — at least to the Securities and Exchange Commission.

What will Brown do? Although Cohen’s not yet been charged with anything, the SEC and FBI seem awfully interested in exploring possibilities along those lines…

In the case of the also-problematic Steven Rattner, Brown seems quietly to have evicted him from the board after a certain critical mass of fines and bans and suits was reached.

With one thing and another, Brown University’s managers are becoming experienced hands in trustee-management (know when to hold ’em; know when to fold ’em) and, like Yeshiva University (home of trustees Bernard Madoff and Ezra Merkin), could probably start offering seminars.

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Some people seem to think this whole thing is one big joke.

Or should I say Très SEC… Brown University’s bouquet has been very Securities and Exchange Commission lately, with the distinctive aroma of federal investigation wafting in particular from the school’s board of trustees. Steven Rattner (after his, er, troubles he seems to have left the board), Steven A. Cohen (a current trustee)… And of course from the school’s president, a loyal Goldman Sachs trustee during the wonder years.

Cohen, a perennial SEC object of interest, has yet again been informed that his firm is under investigation for insider trading… Leaving Brown University with a venerable intellectual dilemma: Hold onto him because some day he’ll give us a slice of his fortune? Drop him before he dries up and goes the route of Rajaratnam?

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UD thanks Roy.

Fun stuff going on at Brown, where students closed out of a course are introducing a market in its seats:

Bradley Silverman ’13, facing unexpected barriers to entry, decided to circumvent the regulations governing seats in those classes. Standing in Lecturer in Economics Maria Carkovic’s class ECON1540: “International Trade,” he displayed a sign reading “Dropping this class? I’ll pay $ for your spot!”

I mean it’s funny that at a school like Brown, whose president was a loyal Goldman Sachs trustee through its Ungodly Compensation / Take-down of the American Economy years, and on whose current board of trustees sit both Steven A. Cohen and Steven Rattner (actually, I don’t see Rattner’s name on the latest board list, but I don’t find any notice of his resignation either), you’ve got people lecturing students about the limits of markets in university settings. LOL.

… reads a banner that keeps popping up at high-traffic locations on the campus of Brown University. It’s there to greet the trustees, who met a few days ago on campus. And to, you know, get some discussion going.

The banner targets one trustee in particular:

Steven Rattner ’74 P’10 P’13 …has settled allegations with the Securities and Exchange Commission and the New York Attorney General’s Office that he performed illegal favors to garner business for the private investment firm Quadrangle Group by paying multi-million dollar fines and accepting temporary bans from the securities industry.

Here’s an article that evokes the larger world of which Rattner is a part. The students are right to ask whether these sorts of people should be closely associated with universities. A couple of excerpts:

… Virtually every one of the major players on Wall Street was … embroiled in scandal, yet their executives skated off into the sunset, uncharged and unfined. Goldman Sachs paid $550 million last year when it was caught defrauding investors with crappy mortgages, but no executive has been fined or jailed — not even Fabrice “Fabulous Fab” Tourre, Goldman’s outrageous Euro-douche who gleefully e-mailed a pal about the “surreal” transactions in the middle of a meeting with the firm’s victims. In a similar case, a sales executive at the German powerhouse Deutsche Bank got off on charges of insider trading; its general counsel at the time of the questionable deals, Robert Khuzami, now serves as director of enforcement for the SEC.

… [It’s] a closed and corrupt system, a timeless circle of friends that virtually guarantees a collegial approach to the policing of high finance.

… You want to win elections, you bang on the jailable class. You build prisons and fill them with people for selling dime bags and stealing CD players. But for stealing a billion dollars? For fraud that puts a million people into foreclosure? Pass. It’s not a crime. Prison is too harsh. Get them to say they’re sorry, and move on. Oh, wait — let’s not even make them say they’re sorry. That’s too mean; let’s just give them a piece of paper with a government stamp on it, officially clearing them of the need to apologize, and make them pay a fine instead. But don’t make them pay it out of their own pockets, and don’t ask them to give back the money they stole. In fact, let them profit from their collective crimes, to the tune of a record $135 billion in pay and benefits last year. What’s next? Taxpayer-funded massages for every Wall Street executive guilty of fraud?

The mental stumbling block, for most Americans, is that financial crimes don’t feel real; you don’t see the culprits waving guns in liquor stores or dragging coeds into bushes. But these frauds are worse than common robberies. They’re crimes of intellectual choice, made by people who are already rich and who have every conceivable social advantage, acting on a simple, cynical calculation: Let’s steal whatever we can, then dare the victims to find the juice to reclaim their money through a captive bureaucracy.

Worldwide, happiness equates very strongly with equality — mostly status equality, but the countries that have a very short ladder between the richest and the poorest people are a lot happier than those where a few people make a lot of money and a few people don’t make much money. In Denmark, a CEO only makes about three times as much as an average worker, whereas here in the U.S., you can have a CEO making many thousands of times as much as an average worker.

The author of a new book about the happiest places in the world helps us put the resurgent insider trading scandal in the United States in context.

The reason UD goes after universities like Brown and Harvard and Chicago, whose boards of trustees include increasing numbers of the morally shady hyper-rich (boards of trustees have always included small-time crooked cronies — we’re not talking about that), is that of all cultural locations, universities are supposed to be serious places, engaged in serious thought about how to live. Trustees run universities; they set all sorts of crucial policies; they sign off on all sorts of crucial decisions. Symbolically, these people embody and articulate the foundational values of their academic institutions. They’re trustees, after all, people to whom students and faculty entrust the ethical and intellectual, as well as financial, welfare of the institution.

Remember the law professor at the University of Chicago who got into all sorts of trouble and enraged thousands of people because, with a household income of around $450,000, he complained about his deep unhappiness in the current economy, under a President who might increase taxes on some of that money?

If that guy had been located anywhere outside of a university, no one would have batted an eyelash at his sense of entitlement, his refusal to take even a hint of a civic attitude toward his wealth and good fortune. In every place in this country except universities (okay; maybe churches), people positively applaud amoral acquisitiveness. Greed is good, yadda yadda…

So it’s always something of a shock to realize that a university like Harvard until recently paid each of its top investment people 35 million dollars a year, and that it hoarded unto itself a 35 billion dollar endowment.

I mean! No one’s asking for universities to be shabby thready head in the clouds sorts of places; but really…

Blinded by the billion dollar blizzards swirling around hedge fund managers, universities have been piling their boards higher and deeper with these people. Of course the universities know they’re taking a risk by elevating possibly insider-trading hedgies to positions of immense trust. Will the hedgies have time to give the school a one hundred million dollar gift before they have to go to prison? How much damage to the reputation of the school will its high-profile association with financial criminals generate?

Well, we’re about to find out.

Meanwhile, universities might take a deep breath, shake themselves off, and ask whether putting their presidents on the boards of places like Goldman Sachs, investing in firms like Steve Rattner’s, and handing the fortunes of the institution over to money-obsessed cheats is, in the long run, a wise policy.

Yesterday it was Steve Rattner… Today, another member of your university’s corporation is in the news.

All eyes are on Brown trustee Steven A. Cohen.

Plus:

The [FBI] investigation is said to look into a broad range of firms, from hedge funds to Goldman Sachs.

Goldman Sachs is where, for ten years, Brown University President and corporation member Ruth Simmons sat on the board of trustees.

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Update: Says here Brown has invested in Rattner’s firm.

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.