At first, the FBI considered sending an agent to work undercover at one of the suspected hedge funds …

“We couldn’t get in. It was such a closed industry — much like an organized crime family — that it was difficult for the FBI to either introduce an undercover agent or recruit a cooperator.”

Corrupt traders relied upon secret alliances, longtime friendships and even sexual relationships.

… [Raj] Rajaratnam relied on Anil Kumar, a former McKinsey partner, and Rajiv Goel, a former managing director at Santa Clara, California-based Intel, whom he’d known for decades. All three attended the Wharton School at the University of Pennsylvania in Philadelphia.

Born in Sri Lanka’s capital, Colombo, Rajaratnam was educated there at St. Thomas’ Preparatory School before leaving for England, where he studied engineering at the University of Sussex. He came to the U.S. to get his master’s of business administration, graduating from the University of Pennsylvania’s Wharton School in 1983.

Two of his Wharton classmates — Anil Kumar, who became a partner at McKinsey & Co., and Rajiv Goel, who was a managing director at Intel — testified against him at the trial, telling jurors how their relationships began at the school and how they turned to crime. Both pleaded guilty and testified for prosecutors.

Found guilty on all counts today.

… in the insider trading racket.

The University of Pennsylvania school is pumping out insider traders a mile a minute.

Hard to keep up.

Lawdy!

… has resigned.

NYT.

From the U Penn newspaper:

The announcement also comes two months after Wharton Board of Advisors Chair Marc Rowan called for Magill and Board of Trustees Chair Scott Bok’s resignation — alleging that the two leaders tolerated “antisemitism” on campus. In addition, Bok allegedly pressured Rowan and at least three trustees to step down after they publicly criticized the University’s response to the Palestine Writes festival. 

So there has been major internecine battle, and one side has definitely won. (Bok has also resigned.)

Pablo Eisenberg, a hero of this blog (UD has forever shrieked at super-icky moneybags who give their hundreds of millions to Harvard), has died.

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(By the way — Harvard’s current endowment woes – it has only just reached 53.2 billion dollars – have energized its alumni network to organize a massive, unprecedented, Save Our School campaign, with outreach via Go Fund Me pages in addition to traditional methods. “Our rainy day fund is down to 10.5 billion,” warns Sam Bankman-Fried, an MIT grad who nonetheless accepted a position as head of Harvard fund-raising because “Harvard is the lifeblood of Cambridge; when it goes, the city itself is imperiled.”)

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And as to how to convince people who give their money to Ivy League schools, rather than to the sort of places Eisenberg lists in my headline, to redirect their money… Well, you need to understand the cohort you’re talking about, first of all.

Let’s consider, for example, billionaire investor Marc Wolpow, who gives money to fat cat Wharton. What do we know about Marc?

Here’s our most recent information.

The wealthy head of [a] multi-billion dollar private equity firm is under investigation by Nantucket Police and the state Environmental Police for purposefully untying a 32-foot boat from a slip at Old North Wharf, allowing it to drift out of the Easy Street Basin and into the ferry lane. 

The suspect is Marc Wolpow, the co-CEO and co-founder of the The Audax Group, who allegedly found an unknown boat in the slip he uses on Old North Wharf on the morning of Sunday, Oct. 16…

After Wolpow untied it, the boat drifted dangerously past Steamboat Wharf, got pushed northward in the wash of the car ferry the M/V Woods Hole, then collided with the $5 million, 70-foot Viking sportfishing boat “El Jefe” causing damage to that vessel. It eventually ran aground near 22 Easton Street. 

Reached by phone this week, Wolpow declined to comment. 

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Here’s what’s shocking about this story:

1 Just anyone reached Wolpow by phone.

2 Wolpow declined to comment.

Why allow just anyone to get past your protection squad and reach you by phone? That’s nuts.

Even more bizarre is Wolpow’s refusal to say the obvious about his behavior.

Heard of property rights, asshole? [“Asshole” here refers to the person who got through to Wolpow’s phone.] It’s my fucking slip, I own it, and I don’t have to look at some cheap shitty boat some person decided to put in it. Do you think I want Nantucket boat owners to think I have a cheap shitty boat? It’s my right to do whatever I like to cheap shitty boats and I think the fucker who put it in my slip will think twice before he does it again. Oh, and fuck you for calling me.

Getting a person of this sort (Marc Kasowitz, Howard Marks, Vinod Khosla, Noam Gottesman, the Heliport Guys, stop me when you’ve had enough) to give money to what he inevitably is going to consider cheap shitty recipients will be very difficult indeed.

“I have friends who have smart sons with great marks, great boards, great everything and they can’t get into Harvard,” Trump said. “We don’t know a thing about this guy. There are a lot of questions that are unanswered about our president.”

Well at least – thanks to Mary Trump’s forthcoming book – we now know how Donald Trump got into an Ivy League school.

As a high school student in Queens, Ms. Trump writes, Donald Trump paid someone to take a precollegiate test, the SAT, on his behalf. The high score the proxy earned for him, Ms. Trump adds, helped the young Mr. Trump to later gain admittance as an undergraduate to the University of Pennsylvania’s prestigious Wharton business school.

A couple of things will follow from this Least Surprising Revelation of the Decade:

Uncle Don will tweet that Mary is a fucking piece of shit cunt whore piece of shit. He will then have Kayleigh McEnany announce that “the president was unable to take the SAT due to a disabling bone spur.”

U Penn will take a good hard look at the accolades it has bestowed upon its highest profile grad (“[Trump was] appointed to Wharton’s Board of Overseers in 1987, and the following year appeared in a video promoting the business school. Trump received an award from Wharton in the fall of 2014, just eight months before announcing his candidacy, and the most favorable recent mention of him as an alum comes in Wharton’s list of “125 Influential People and Ideas” from 2012.”). It will cross itself with relief and self-congratulation that it never gave him an honorary degree (Lehigh University however…), and it will announce that it’s opening an investigation into Trump’s degree. With an eye toward rescinding it. I mean, Varsity Blues is one thing…

Oh, and Jared… You’re up…

Oh! And in about a half hour, the Lincoln Project will release a new thigh-slapper.

… as in “Sierra Tucson is the best residential depression treatment center,” but UD has long used the phrase to name something she noticed – perhaps felt is better – years ago, on visiting the vast house of some relatives, a married couple. Like UD, they grew up in middle class Jewish Baltimore and every year when young attended messy noisy happy jam-packed seders in narrow city row houses where cheap wine freely flowed among children and adults.

Having made it, her relatives now floated in a house whose high-ceilinged dining room sat forty people who never materialized, and whose cellared wine lay stacked as in an above-ground cemetery. They knew their neighbors (acres away in a treeless field) only in the territorial way of worrying about whether these people’s extensive lawn projects impinged on their own extensive lawn projects (recall Rand Paul’s serious injuries when one of his neighbors attacked him in a roiling dispute over grass clippings).

Home is so sad, wrote Philip Larkin; but in this poem he’s describing the sadness of having tried but failed to create a comfortable and meaningful domestic space – which is to say, having tried to make a happy life. The house started as

A joyous shot at how things ought to be,

Long fallen wide. You can see how it was:

Look at the pictures and the cutlery.

The music in the piano stool. That vase.

The pathos of Larkin’s house lies in the joyous shot at beauty and depth it obviously tried to be, if you look at its carefully and lovingly chosen pictures and music and vases. The cold pastoral of my relatives’ house lay in it having been conceived and elaborated as pure status display.

UD thought back on that house when she read Robert Shiller on the bohemoth waste of the big house. Shiller understands that “[h]aving a big house is a symbol of success, and people want to look successful,” but, as another finance person, Ellen Weber, notes in the same article, megamcmansions are “ludicrous.” Both she and Shiller are appalled not only at the economic stupidity of this sort of investment (many houses in my local megamcmansion region, Potomac, Maryland, are going begging; and I guess it’s tough all over) but at all the dead air inside it. Weber:

[F]amilies are shrinking. … More and more of our stuff is stored electronically; we should need less storage for it. There’s also a tendency to buy houses with big yards that most people do not use but end up spending lots of money paying someone else to mow and maintain.

Shiller:

[W]e don’t need elaborate kitchens, because we have all kinds of delivery services for food. And maybe you don’t need a workshop in your basement, either. You used to have a filing cabinet for your tax information, but now it’s all electronic, so you don’t need that, either. And bookshelves, for people who read a lot. We have electronic books now, so we don’t need bookshelves anymore.

From another article on the subject:

[M]edian house size has increased by some 1,000 square feet over the past 50 years. At the same time, the average size of the household has fallen as people have fewer kids than in earlier generations, [Wharton real estate professor Benjamin Keys note[s]. “For the houses that don’t fit the families, the prices are going to have to fall.” Add[s] [Dowell Myers, a public policy professor]: “The millennials seem to have a taste for living more sparsely. They don’t want as much furniture. They don’t want as much space.”

Dead space, and depressed people. If you listen, you can hear them singing: Is that all there is?

… following all the different dirt being kicked up in the Philip Esformes trial (earlier posts about the pious Esformes family here). Paying off all of Miami to help him run his rotten to the core nursing homes! Telling one of his comrades in crime to kill himself so as not to have to testify against him! Hiding frail baffled old people when his paid-off tipsters told him an inspection was about to happen! Giving Penn’s basketball coach three hundred thousand dollars to lie and say Esformes Jr was so talented at the game he should be admitted to the school!

Jerome Allen, while awaiting sentencing for taking bribes, took the stand in the Esformes trial yesterday.

Allen said that the son was not qualified to play varsity basketball at Penn. He said he lied to the prestigious university about the son’s qualifications because he had been bribed by Esformes during a series of trips to Miami in 2013. He testified that the father gave him $10,000 in cash each time, the money tucked into a brown envelope stuffed inside a plastic bag, during their meetings in the lobby of the Fontainebleau Hotel… In total, Esformes paid Allen about $75,000 in cash bribes and an additional $220,000 in wire transfers into the coach’s bank account between 2013 and 2015.

Esformes’ lawyer said

Esformes’ son has maintained a nearly 3.6 GPA at UPenn, made the Dean’s List at Penn and plans to graduate from the Wharton School with the class of 2019.

But he failed to mention who Esformes has been paying to take the kid’s courses.

All good writers know never to use exclamation marks! I mean, almost never!

But UD has stumbled over a piece in the U Penn newspaper which demands exclamation marks. She will now quote some of the piece and insert the quotation marks its content demands.

In the wake of the admissions bribery scandal! involving former Penn men’s basketball star and coach Jerome Allen, Penn Dean of Admissions Eric Furda is saying that safeguards need to be put in place in both the athletics and admissions departments.

On Oct. 5, Allen, who is currently an assistant coach for the Boston Celtics, pleaded guilty to bribery in connection to the recruitment of a student athlete – now Wharton senior Morris Esformes – to gain him admission to the University. Allen had been implicated in an indictment of businessman Philip Esformes, who had allegedly defrauded the federal government of $1 billion!!! and had used some of that money to bribe Allen and help Morris get into Penn.

… Furda suggested new professional development and training for staffers in both departments to prevent future incidents of bribery!!!!

[So a guy comes at you with tens of thousands of dollars, private luxury jet trips on his dime, and anything else you want, and says in exchange for this I want my kid who can’t play competitive basketball to get a basketball scholarship and thereby admission to your school. Slowly, now. Think it through. Is this RIGHT or WRONG?]

… [Morris] Esformes was accepted to Penn in 2015 as a member of Allen’s final recruiting class before Allen was replaced by current coach Steve Donahue. Esformes never played or appeared !!!!! on the men’s basketball team’s roster.

Some stories write themselves.

Actually, what you’ve probably learned from reading UD all these years is that almost all stories write themselves, because human beings are limited creatures and the number of plots (conundrums) they can create for themselves is therefore also strictly limited.

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The profoundly pious get rich quick crook who finally gets picked up by the police and carted away to make room for the next profoundly etc. is such an old story.

Specifically, twas ever thus: Credulous grasping god-fearing dolts find a charismatic spiritual/financial advisor who writes best-sellers with titles like The Gospel of Good Success and Entrepreneurial Faith.

The particular guy in question today even has a degree from (wait for it) the Wharton School! (Feast your eyes on America’s Richest Source of Financial Criminals.) He allegedly sold

$3.4 million worth of pre-revolutionary Chinese bonds, which were in default, to the “vulnerable and elderly.”

Southern Methodist U., one of the most pious and dirtiest universities around, had the dude on their board of trustees until recently. They dodged a bullet on that one. Maybe they knew something before the feds did — though, in fairness, they could have told the world about it and maybe spared the vulnerable and elderly their full measure of exploitation.

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But anyway. Another high-toned man of god will be stepping up to the podium soon. It’s a never-ending story.

UD loves this sentence from Edmund Wilson’s 1938 essay about Edith Wharton. Maybe because UD is such a tea drinker.

Will the rise of Trump — suddenly the most famous Penn alumnus on the planet — actually bring the school down?

Penn has apparently always felt inferior relative to other Ivies because its alumni are very underrepresented among American presidents.

But hey – Penn might be on the verge of hitting it big!

And that should be a source of pride. But the Penn alum in question —

“Who would mock a disability? I would never. I’m a smart person. I went to the Wharton School of Finance.”

—

is both an embarrassment and a serious threat to the brand. Some on campus propose that Penn somehow repudiate the person in question – rather in the way Temple repudiated Cosby…

Well, it doesn’t become a real problem unless he wins.

… “the life blood of this and almost all other nations,” UD always refers her readers to its explanatory urtext, The Great Gatsby. Gatsby is the great American novel in part because it captures better than any other literary work the entirely engineered, shabby dreamweaver thing that is the modern self-made – or rather made-self – American.

If you cry for poor James Gatz/Jay Gatsby at the end of that novel, dead in his pool, spare a tear for Melanija Knavs/Melania Knauss/Melania Trump/Melania whatever last name she takes after Trump divorces her… because it’s not really her fault that she read a plagiarized speech written for her (she’s not well-educated — like Gatsby, who advertises himself as “an Oxford man” but who had only a glancing acquaintance with that school, Melania claims to have graduated from college when she did not) instead of an original speech written for her. F. Scott Fitzgerald already gave us her shiny bogus world, which she had every reason to believe was shiny and bogus all the way down.

Is there a scammy, crime-tinted, er, aspect to that world? Has her husband, like Gatsby, been a little less than legit in his dealings? Well he didn’t graduate from Wharton for nothing and it’s a big bad dirty world out there, etc., etc. etc. but the main thing is that it all looks good and no one’s floating in a pool. Keep the aspidistra flying. Brazen it out.

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Yes of course there’s an ugly under the pretty. Slave Michelle provides the labor; Master Melania and her Manipulators exploit it. But after all “the Obamas don’t really belong in the White House, i.e., they didn’t legitimately achieve their current status.”

Not everybody, in other words, gets to play the Gatsby game – like say if you were really born in Kenya.

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Has damage been done to Trump’s campaign, as some observers suggest?

No. Trump’s followers are people who do not mind that their candidate correctly characterizes them as “the poorly educated.” Melania would have done damage had she attempted to disentangle, in the minds of her listeners, Slovenia, Slovakia, Slavonia, Slobodan Milošević, and Lower Slobbovia.

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UD thanks Dave.

Why do you think Beware the B-School Boys is one of this blog’s perennially popular categories? If the statement in my headline is true, or roughly true, what do you think places like Wharton, which not only produced Donald Trump and Raj Rajatnaram and Steven Cohen and many of their, er, close associates, but boasts a long glorious history of producing scads of America’s most spectacular thieves, have been teaching people all these years? I mean, not the specific content of courses… I mean the gestalt.

And what a remarkable fact about American culture, that we have these gilded b-schools specializing in predatory capitalism. And the highest-profile b-school of them all produced not only the founder of Trump University, but – possibly – the next president of the United States.

Fraternities create drug distribution gangs; the Wharton School creates insider trader gangs. University athletic teams create rape-gangs and theft-gangs. At the very highest levels, your team of trustees creates international news.

Campuses are places where you connect with people like yourself – people who have similar strong interests and ambitions. Of course in most cases those ambitions aren’t criminal. But if they are, the isolated secret-brotherhood hothouse intensity of certain campus groups, the general public’s romanticization of college and graduate students as inquiring innocents, and the often rabid winner-take-all ideology of some of these associations (the athletes’ cafeteria at the University of Oregon has EAT YOUR ENEMIES in big illuminated letters on the wall), will make it temptingly easy to criminalize your association, if that’s what you’d like to do.

Not everyone on your wrestling team – to take the latest example, from the University of Minnesota – will want to take part in your Xanax distribution conspiracy. But the beauty of things like wrestling teams is that, once inducted into the brotherhood, it’s unlikely even non-participants will squeal.

My point is that when you’ve already got an organized team, you make much easier the transition to organized crime. There’s a lot of disorganized drug selling and buying at colleges, but it’s always going to be small time, and it’s going to be vulnerable to detection (see Wesleyan University). Fraternity drug rings only seem to get infiltrated after they’ve had a chance to grow enormously, as at San Diego State. The Minnesota gang seems to have had a chance to grow similarly huge — it handles spectacular quantities of Xanax.

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UD thanks two readers
for telling her about
the Gophers and the Xanax.