The man who pursued the biggest Ponzi scheme in history recounted the story and shared advice with Belmont student Wednesday during a convocation hosted by the Edward C. Kennedy Center for Business Ethics.
Harry Markopolos said his study of Bernie Madoff’s phony investment strategy was his first experience with “pure evil.”
“He was a horrible case to be part of, and I don’t have fond memories of it,” he said.
Markopolos, a portfolio manager and chief investment officer for a multi-billion dollar derivatives asset management firm in Boston, Mass., led a four-person team through an eight-and-a-half-year investigation that spanned two continents to understand Madoff’s investment strategy.
“His numbers were too good to be true. He never had a loss and took clients from every good firm,” he said. Markopolos said he realized within five minutes of looking at documents that Madoff was operating a fraud, but it took longer to convince the Securities and Exchange Commission.
Of the $65 billion that funneled through Madoff’s hands, most went to old investors receiving an average 12 percent annual return, 4 percent went to luring new victims through feed funds and private client banks and the remaining 1 percent Madoff kept. Among the red flags Markopolos found were undecipherable accounting statements and similar account numbers at different banks in different countries. (more…)
Gift from Helen Kennedy announced at event featuring author/financial analyst Harry Markopolos
Belmont University’s College of Business Administration (COBA) celebrated today a generous endowment received from civic leader and Belmont Trustee Helen Kennedy by naming its Center for Business Ethics in honor of her late husband, Edward Creasman Kennedy, a local businessman who exemplified the values the Center promotes. A graduate of Hume Fogg High School and lifetime deacon of Judson Baptist Church, Mr. Kennedy co-founded Ed’s Supply Company and was actively involved in many organizations related to the heating, cooling and refrigeration industry. Mr. Kennedy also served 12 years as a Belmont University Trustee.
“This naming allows a new tune to be hymned throughout Belmont,” said Mrs. Kennedy. “The Edward C. Kennedy Center for Business Ethics can provide a strong foundation on professional ethics for every University program.”
Tom Connor, a personal friend and former business partner of Ed Kennedy, attended the naming ceremony and shared his thoughts on Ed’s staunch ethical conduct in business matters. “Ed loved Belmont. I don’t think there’s a way he could be better honored than to have a center on this campus named for him and for it to be connected to ethics. And, I don’t believe Belmont could have selected a better or more ethical person to name this center after than Ed Kennedy.”
Richard K. Davis, chairman and chief executive officer of U.S. Bank shared his views on the importance of regulating ethical business behavior with Belmont students, faculty and Nashville business leaders on Monday, March 26.
“Ethics can be learned now. What I can’t drill into your head is when a lot of people are doing little things wrong, you will want to draw the line on when it will end. You can draw the line in the sand now that you will adhere to as you begin practicing business,” he said.
Davis emphasized the need to create a business culture with consistent values and regular audits as the cornerstone to long-term success. He encouraged government regulation on ethical business practices, such as shareholder access and whistleblower incentives to promote honesty, integrity and transparency. He also summarized the evolution of corporate responsibility from 1919 to the present.
“Making money is not a bad thing, because capitalism is what got America where it is today, as long as you do it the right way with honesty,” Davis said.
Davis was recently recognized as the Banker of the Year by the American Banker and received the Hendrickson Medal for Ethical Leadership. U.S. Bank is the nation’s fifth largest commercial bank with $340 billion in assets. The company has more than 3,000 banking offices, 5,000 ATMs and 60,000 employees in 25 states. Each year, about 50 U.S. Bank employees face jail time for white collar crimes, he said. U.S. Bank is characterized as one of the “cleanest” and best managed megabanks today and does not make loans to munitions or pornography companies, among others that conflict with company values. (more…)
“In work, we create both the product and the person,” noted speaker Al Gini said during his convocation lecture Wednesday titled “Work, Identity and Self.” A professor of business ethics and the Chair of the Department of Management at Loyola University in Chicago, Dr. Gini spoke on the impact of work on the human spirit, not just the impact on the wallet.
He said that as a society, we rarely invite reflections on the nature of the work we do; rather, we’re only trained to work and expected to perform. Dr. Gini said in that routine we lose the most important aspect of work, creating ourselves.
He said he believes there is a direct correlation between our quality of life on the job and off. Since individuals spend so much time working, if the work is not enjoyed then chances are day-to-day life won’t be either. Dr. Gini concluded his lecture noting, “Don’t give up on your integrity… don’t let that happen to you.”
Dr. Pat Raines, dean for the College of Business Administration and interim provost, moderated a panel discussion last Friday about ethical issues in today’s political environment. Panelists included Congressman Jim Cooper, D-5th district, and lobbyist Stewart Clifton. Clifton is an attorney and lobbyist for such groups as the League of Women Voters, the Alzheimer’s Association and National Association of Social Workers. U.S. Representative Marsha Blackburn, R-7th district, was supposed to participate; however, she had to attend a press conference in Spring Hill announcing the re-opening of the area’s GM plant.
During their opening statements, both Cooper and Clifton stressed the importance of integrity in politics. Cooper opened by announcing, “Well, if I had 400 jobs to announce in my district, I’d probably miss this, too,” addressing Blackburn’s absence. Cooper went on to lament the “cocooning effect of news” and stress the importance of informed voting. Clifton, on the other hand, used his opening address to make general observations on the role of integrity in politics. He noted that “to make any impact on the political process requires relationships. There are no lone ranger success stories in public policy.”
Before starting the question-and-answer session, Dean Raines said, “Ethics in politics should not be an oxymoron.” The panel brought out several interesting observations from Cooper and Clifton. Both panelists agreed that political figures are held to a higher standard—but that’s a good thing. While referring to figures such as Mark Twain, Will Rogers and Jon Stewart, Cooper said, “Thank goodness we have those folks because it shines a spotlight on the ridiculous.” Clifton said, “I don’t think public officials have a monopoly on bad behavior… but no one gets scrutinized quite like public officials.”
When asked about the current state of news, both Cooper and Clifton drew a line between journalism and entertainment and agreed most televised news falls into the entertainment category. Cooper said, “The news gatherers, the truth tellers, are in short supply.” He blames the lack of truly well-educated journalists. Clifton said we still have legitimate journalism, but he said, “It is sad to see the failure of a general shared body of information… There are just separate realities out there created by media.”