Frank Rich Manages a Three-fer

It’s … good news, I guess, that Bill Clinton is not involved with Trump University. But this is just the latest example of the land mines Clinton has been planting in his wife’s path for the presidency, should she indeed decide to run. As the [NY] Times reported in a major investigation, there are a lot of questions and there is not a lot of transparency about how the Clinton Global Initiative operates. And that’s the nonprofit Clinton arm of Bill Clinton’s post-presidency. His other business dealings have been profuse and often murky, and every single one of them is going to be investigated by the press if a Hillary Clinton campaign goes forward. The Bloomberg piece [on Clinton’s heading up a for-profit ed venture] does not find any illegality in this instance, but the sleaze factor is considerable. Clinton serving as the “Honorary Chancellor” of a diploma mill that rips off young people — and doing it in a financial partnership that includes the hedge-fund titan Steve Cohen, whose SAC Capital Advisors is ground zero for insider-trading criminality — does not pass the smell test.

Trump, Laureate, and Brown University’s highest-profile trustee, Steve Cohen. The story of today’s university, all in one short paragraph.

Dressed down…

… but still sent up.

Brown University’s highest profile trustee sees another one of his employees go to prison. Is Brown’s Steven Cohen next? Will he preside over that university’s decision-making from prison?

ME IVY LEAGUE. ME CAPTAIN BROWN UNIVERSITY FOOTBALL TEAM. ME BEAT UP WOMEN.

They lionize him at Brown (well, they lionize always-in-trouble-with-the-law trustee Steven Cohen at Brown too) (and… well…); they made him captain of the football team. A golden boy, an Aryan from Darien, Christian Garnett’s just one more big ol’ adorable football playing SUV driving violent drunk… The sort rife at our universities, and what a blessing to these settings of meditation and reason.

Having finished with Brown, Christian now plies his trade among high school football players, modeling for them the whole big car/big man/big thirst/big swing thing. It’s unusual, however, for these guys to beat up female police officers. That’s Christian’s own variation on the theme.

It all started [with] him driving his Jeep down Connecticut Avenue in Norwalk … A police officer, Michelle McSally, noticed that he was driving at a high rate and it seemed as though one of his tires were missing. She then spotted the tire on the side of the road. As she went over to the car, she noticed he was trying to conceal something in the back. Turns out he was hiding his drug [paraphernalia]. At this point, you would think you would just give up and go with the flow. After all, you’re screwed. Not our boy Christian. He told the officer that he knew his tire was gone, he was going to get it filled with air at the nearby gas station- (How do you fill up a tire that’s not connected to your car?) His bloodshot eyes and slurred speech alerted the officer to call for back up. After he failed the first two field sobriety tests, he told the officers he couldn’t perform the third… standing on one leg.

… When [an] officer… tried to cuff him, he used his 6’2”, 240 pound frame to kick her and resist arrest. As he continued to swing his arms around like a lunatic, another officer gave him a nice, quick two blows to the face … [Unable to subdue Garnett, police Tasered him – they had to do it twice.] [He] was so unruly at the hospital that they had to handcuff him to the bed. He tried to kick a camera out of [the hand of an officer] … documenting the injuries. He slightly calmed down after a doctor threatened to give him sedatives to chill him out. It was at this point that he turned his anger to the nurses- The male nurses. Whenever one would walk by he would yell out “You must be a real Tommy tough nuts”.

Is there any moment at which the University of Nebraska takes its hagiography of Richie Incognito off the web? Might Brown replace the photo of Garnett that accompanies its awed online account of him with his more recent police issued one?

“Mr. Cohen, whose enormous compensation and conspicuous consumption have made him an emblem of the new Gilded Age, has not been charged criminally. Still, the plea deal is a devastating blow to Mr. Cohen, as the firm that bears his initials will acknowledge that it was a corrupt organization.”

Brown University’s finest.

Steven Cohen remains on Brown’s board of trustees, an inspiring reminder to students there that you can run “the first large Wall Street firm in a generation to confess to criminal conduct,” a firm whose corruption is “unprecedented in the history of hedge funds,” a firm that has become “a symbol of financial wrongdoing,” and still be a Brown University trustee! Go ahead and be HUMongous financial wrongdoers, kiddies! The more money you make, the more likely you’ll be named to the Brown Corporation!

How humongous, you ask? The man’s a fucking pioneer! He’s making history! The SEC, emboldened by its success against Cohen, is said to be going after a number of other university trustees and honorary degree recipients.

[The SEC is] weighing a criminal charge against JPMorgan Chase [headed by Syracuse University commencement speaker/honorary degree recipient Jamie Dimon] related to its role as Bernard L. Madoff’s [Yeshiva University trustee] banker…

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UPDATE: MattF, a UD reader, links to this important background on Cohen. UD thanks him.

In 2011, Brown University’s Cohen Gallery – a space named for its benefactor…

… 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.

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?

“The letter may indicate that either the SEC or the U.S. attorney is preparing to sue or indict Cohen, said lawyers who asked not to be named because of the sensitive nature of the case.”

Now’s the time for Brown University to inaugurate a Steven A. Cohen Legal Defense fund, as the federal government begins to look as though it might move against that university’s most high-profile trustee.

True, for now Cohen has not been charged; and for now his personal fortune is close to ten billion dollars. But he may be charged; and already he has what Bloomberg News calls “fleeing clients” costs. Just in case things do go south for him, this would be a fitting continuation of the support of the hedge fund manager that the Brown Corporation has thus far maintained.

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At least he’s in good company.

By seeking Mr. Cohen’s testimony, federal prosecutors could be trying to get him lie before the grand jury, legal experts say. This way, they could try to charge him with perjury instead of insider trading, which was a similar tack that the government took in its criminal case against the media personality Martha Stewart.

Mellow Out

It’s an old problem, one that this blog has followed with concern for many years: How do you handle it, public-relations-wise, and logistics-wise, when a politician or money man whose name you’ve plastered all over campus buildings goes to jail for corruption? Certain schools – Seton Hall, most prominently – experience this problem over and over again.

There’s an interesting sort of time-sensitive aspect to it. Most cases, to be sure, are after the fact – the name went up, the guy went to prison, the name got sandblasted. Rising action, climax, denouement. Some are before – Georgetown was going to name Douglas Ginsburg, but the SEC named him first. And a few are sort of during – Nevin Shapiro’s little student lounge plaque had just gone up when when Nevin went down.

Many and varied are the problems associated with de-naming. If, like U Miami, you’ve only done a little plaque, piece of cake. Just take it down. When we start moving in the direction of engraving, however, we’re talking big money. Sandblasting doesn’t come cheap. It’s also embarrassingly loud. You can have some guy steal into Nevin’s room at night and remove the thing; but does this guy look like the quiet sort? Why not just yell We made a terrible mistake or We consort with criminals at the top of your lungs? And try explaining to Seton Hall parents why hundreds of thousands of their tuition dollars went toward pulverizing the names of crooks from three of your buildings. So far.

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Forget trying to see these things coming. No school – up to and including burnished ones like Brown, which will eventually have to do something about trustee Steven Cohen – is likely to scrutinize a politician or a hedgie and decide they’d rather not go there. Money is money, and you don’t want to insult a person from the money class. Word gets around. This is about cleanup.

UD has long proposed the erasure/sheeting approach. Inspired by Hasidic groups who erase images of women from photos (Hillary Clinton is the salient example here), and Muslim or Muslim-sensitive groups who sheet women in photos (Southampton University’s advertising materials are the go-to place here), UD has proposed simply adding or subtracting letters from the name.

So in the most recent case – jailed, disgraced Pennsylvania state senator Bob Mellow – you’ve got a couple of universities there with MELLOW engraved on buildings.

They could sheet/erase, by way of adding, pulling, or shifting letters. MELLOW, without too much work, could be altered to read FELLOWS, which sounds very British (Fellows of All Souls); for less money, they could go in the other direction – down-home and friendly – by dropping the M and W and putting an H at the beginning of the name: HELLO! They could be whimsical and add YELLOW to the name… Joycean, and put an S at the beginning (“He kissed the plump mellow yellow smellow melons of her rump, on each plump melonous hemisphere, in their mellow yellow furrow, with obscure prolonged provocative melonsmellonous osculation.”)… They could do homage to Saul Bellow by changing only one letter…

Ginsburg’s Howl

Go where the need is greatest, they say, and wealthy businessman Scott Ginsburg became convinced that yet another fitness center on Georgetown University’s campus – this one exclusively for the use of law students – would best serve humanity.

He gave millions of dollars toward its construction, and the whole deal was basically one of those love-fests – Georgetown was gonna plaster his picture on all the medicine balls or whatever; the school invited him to be on the Board of Visitors …

Sure, the university was aware that the SEC was somewhat, er, exercised about Ginsburg’s insider trading; but what would universities, from Brown to the University of Michigan, do without insider traders on the faculty and the board of trustees? All that money has to come from somewhere…

So, I mean, they took the money and they built the dealie, but when Ginsburg actually got hammered by the SEC, Georgetown decided, on reflection, that it would rather the face of an insider trader not be hung, like one more religious icon, from the Jesuit school’s walls.

This behavior shattered Ginsburg’s innocence. In his lawsuit, he writes:

“Ginsburg was invited to join the Georgetown Board of Visitors, welcomed to university functions, invited on university trips and generally embraced by the university, all with the goal of extracting ever more money from him.”

So! It had all been a nefarious tit for tat!

Now that the scales have fallen from Ginsburg’s eyes, he has sued, not only to get his money back, but for the repair of his idealism.

“Titan sent an email Nov. 21 saying that it had money with SAC and was monitoring the situation, said Marisel Lieberman of the Florida International University Foundation, a Titan client that handles the university’s endowment.”

Big investors are starting to pull out of the fund run by Brown University’s highest-profile trustee, Steven A. Cohen. Too much bad “insider trading” press.

Titan invests for FIU, and has decided to take that university’s money elsewhere.

Look. It can’t be much of a jolt to you that sophisticated hedge funds …

… 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.

Eli Okun, a reporter at the Brown University Daily Herald…

… keeps a close eye on Brown’s highest-profile trustee, Steven Cohen, and his unlucky-in-love hedge fund, which keeps hiring people who betray the firm’s passionate commitment to the highest business ethics.

It’s hard to account for this betrayal. Six traders charged with insider trading! Freud would call it repetition compulsion. You keep falling for people who break your heart. Who knows why? I guess Steve Cohen is naive.

But Brown isn’t.

Marisa Quinn, vice president for public affairs and University relations, had not returned multiple requests for comment on the developments as of Wednesday night.

Talk to the press? Are you fucking kidding me?

Edward Shorter, author of the forthcoming, wonderfully titled…

How Everyone Became Depressed: The Rise and Fall of the Nervous Breakdown, talks about how doctors diagnose personality disorders.

The most recent edition of the DSM series, DSM-IV in 1994, had a whole slew of personality disorders, including histrionic, narcissistic, borderline, and so forth. The editor of DSM-IV, Allen Frances, was a psychoanalyst, and the list is a kind of last gasp. The problem is that patients who qualified for one, tended to qualify for almost all of them. The individual “disorders” were quite incapable of identifying individuals who had something psychiatrically wrong with them; the “disorders” had become labels for personality characteristics that are found in abundance in the population.

Moreover, who needed labels? Psychiatrists had a seat-of-the pants definition of a PD: “If your first impression of your patient is that he is an asshole, then he probably has a personality disorder.”

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You begin to see the basis of Steven Cohen’s defense.

“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.”‘

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?

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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?

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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.

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.

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