Cover image for The end of ethics and a way back : how to fix a fundamentally broken global financial system
Title:
The end of ethics and a way back : how to fix a fundamentally broken global financial system
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Publication Information:
New York : Wiley, 2013
Physical Description:
xlviii, 253 p. ; 24 cm.
ISBN:
9781118550175
General Note:
Includes index.
Abstract:
Bestselling author and professor Ted Malloch calls for real financial reform to restore confidence and fairness to a broken system From Ponzi schemes to the credit crisis to the real estate bubble, the financial industry seems to have lost its way on the road to riches. As private greed continues to undermine the public good, one might wonder what ever happened to business ethics. And how can we reform the global financial system to benefit everyone, rather than just the very lucky few? In The End of Ethics and the Way Back, the bestselling author of Doing Virtuous Bu.
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30000010321508 HG103 M35 2013 Open Access Book Book
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Summary

Summary

Bestselling author and professor Ted Malloch calls for real financial reform to restore confidence and fairness to a broken system

From Ponzi schemes to the credit crisis to the real estate bubble, the financial industry seems to have lost its way on the road to riches. As private greed continues to undermine the public good, one might wonder what ever happened to business ethics. And how can we reform the global financial system to benefit everyone, rather than just the very lucky few? In The End of Ethics and the Way Back , the bestselling author of Doing Virtuous Business teams up with attorney and Yale University Postdoctoral Fellow, Jordan Mamorsky to examine the most recent failures of business virtue, prudence, and governance--from Bernie Madoff to Jon Corzine and MF Global--before offering a set of structural and holistic solutions for our current ethical crisis in global finance.

Features compelling case studies that reveal the saturation of economic vice in global finance Suggests structural reforms to the global financial system that would increase confidence among consumers and encourage ethical behavior among finance professionals Written by Ted Malloch, author of the bestseller Doing Virtuous Business with attorney Jordan Mamorsky Ideal for financial regulators, business students and academics, and professionals in the finance industry


Author Notes

Theodore Roosevelt Malloch is Research Professor for the Spiritual Capital Initiative at Yale University. He was Chairman and Chief Executive Officer of The Roosevelt Group, a leading strategic management and thought leadership company. He has served on the executive board of the World Economic Forum-Davos; has held an ambassadorial-level position at the United Nations in Geneva, Switzerland; worked in the U.S. State Department and Senate; worked in the capital markets at Salomon Brothers on Wall Street; and has sat on a number of corporate, mutual fund, and not-for-profit boards, including the University of Toronto International Governing Council, a Pew Charitable Trust board, and the Templeton Foundation. Ted earned his PhD in international political economy from the University of Toronto.

Jordan D. Mamorsky is an experienced attorney specializing in business regulation, corporate governance, and compliance. He was a postdoctoral fellow at Yale University where his research focused on the legal, financial, and ethical failures that contribute to financial crisis, corporate illegality, and breach of legal fiduciary duties. Jordan formerly worked at the U.S. Treasury Department, where he received the "special act award" in recognition of his recommendations detailing the dangers of predatory subprime lending in low-income communities. He is a contributor to Morningstar Advisor . He is an active practicing attorney and has represented Fortune 500 companies, global investment banks, insurance companies, hedge fund managers, health services corporations and an international sports league, among other clients.


Table of Contents

Forewordp. xvii
Acknowledgmentsp. xxix
Introductionp. xxxiii
Prologuep. xxxix
Part 1 Economic Vicep. 1
Chapter 1 The Selfish Betrayal of the Global Investor: Libor and Its Consequencesp. 3
The Calculation of Liborp. 5
The Rise and Fall of the World's Financial Benchmarkp. 8
Knowingly Asleep at the Wheelp. 13
A Troubling New Normalp. 16
Notesp. 17
Chapter 2 Jon Corzine's Fallen Empire of Risk: MF Globalp. 19
History of MF Globalp. 21
Jon Corzine's Midwestern Rootsp. 22
The Rise of "Fuzzy"p. 23
The Establishment of MF Globalp. 26
Rogue Trader Scandalp. 27
From Gubernatorial Disgrace to MF Global CEOp. 28
MF Global under Corzinep. 29
Risk Governance Failuresp. 32
Notesp. 33
Chapter 3 The Continued Rating Agencies Game: Will Rating Agencies Be Reined in for the Sake of Global Market Stability?p. 37
History of Raring Agenciesp. 43
Mortgages and the Ratings Boondogglep. 47
Notesp. 51
Chapter 4 Belligerent Leadership and the Demise of Lehman Brothersp. 55
History of Lehmanp. 57
Brewing Angerp. 60
Uncaging the "Animal"p. 62
Culture of Angerp. 64
Increasing Risk and Authorityp. 66
Walsh's Risep. 67
A Gorilla Bursting the Bubblep. 69
Extreme Leveragep. 71
The Deception of Repo 105p. 73
Fuld's Marginalization of Risk Managementp. 75
Fuld's Last Chance to Save Lehmanp. 77
Notesp. 79
Chapter 5 How Out-of-Control Pride Brought Down Bear Stearnsp. 83
History of Bearp. 85
A Different PSDp. 89
Greenberg's Vision of Corporate Thrift at Bear Stearnsp. 91
Bridge Bum Turned Bear Salesman and CEOp. 93
A Casino Culturep. 95
BSAM: Bear Stearns' Kryptonitep. 98
"Never a Losing Month"p. 100
The End of Bear Stearns: The Importance of Golf and Bridge during a Liquidity Crisisp. 105
JP Morgan and the Takeover of Bearp. 106
Notesp. 107
Chapter 6 Tyco: Exceptional Greed and the Destruction of a Billion-Dollar Companyp. 113
Tyco Historyp. 115
The Makings of a "Bad" CEOp. 117
Seeds of Greedp. 118
Kozlowski's Culture of Fear at Grinnelp. 119
Looting the Companyp. 120
Kozlowski's Accomplicesp. 124
A Convicted "Piggy"p. 128
Notesp. 128
Chapter 7 Insatiable Lust and Two of the Most Destructive Ponzi Schemes in American Historyp. 131
The Ponzi Scheme and Societyp. 133
Bernie Madoff and the Seeds of Lustful Temptationsp. 134
Madoff's Culture of Sexual, Criminal, and Moral Deviancep. 138
Tom Petters, the High School Dropoutp. 139
Birth of the Ponzi Scheme, Petters Company Inc.p. 140
Succumbing to Uncontrollable Lustp. 141
Madoff's Cast of Charactersp. 142
Petters' Cast of Charactersp. 151
Will We Witness Another Madoff?p. 155
Notesp. 155
Chapter 8 HealthSouth and WorldCom: How a Gluttonous Appetite for Expansion Resulted in Accounting Fraud and Failed Corporationsp. 161
HealthSouthp. 163
Bernie Ebbers and WorldComp. 172
Blunting Future Accounting Fraudp. 178
Notesp. 179
Part 2 Recommendationsp. 183
Chapter 9 Why Financial Regulation Has Failed, and What to Do about Itp. 185
The Failed Promises of Dodd-Frankp. 185
The New Rules of the Game that Reinforce Vicep. 189
A Dummies' Guide to Save the SECp. 194
The Regulatory Reforms Necessary to Reverse the End of Ethicsp. 195
Reforms Needed for the Commodities Marketp. 202
The Need for Heightened and Streamlined Fiduciary Rulesp. 205
Notesp. 208
Chapter 10 The Case for Reintroducing Governance and Moralityp. 213
The Important Demand for Corporate Governancep. 213
The Importance of Corporate Responsibilityp. 215
The Importance of Reputation and Avoiding Long-Term Litigation Costsp. 218
Bonuses Redux: Corporate Welfare Reform and Cutting Golden Parachutesp. 220
The Need to Morally Redefine Ourselves on the Macro Levelp. 223
Rebuilding Our Characterp. 226
How to Remedy the Evils in Modem-Day Consumerismp. 227
Virtue and the Moral Lifep. 228
The Consequences of Modern Selfishnessp. 230
Modern Theories and Institutionsp. 232
Democratic Morality and Our Current Crisisp. 233
Notesp. 234
Chapter 11 The Way Backp. 237
Appendixp. 241
About the Authorsp. 249
Indexp. 251