At every business ethics presentation I have been involved with as of late, I start with the statement that “every choice has a consequence”. It is a fundamental truth that none of us can escape and for those caught in white collar crime – it’s a statement at the root of the consequences that inevitably must be faced.
Indeed, if there is one single message in the world of ethics, it is to be aware of your choices and accept that consequences – either good or bad – will follow from the choices you make.
Case in point is the recent story reported by the Associated Press in a Sheridan Wyoming online publication dated March 28, 2013 entitled: “Wyoming Official Charged for White-Collar Crime.”
The story was of especial interest to Wyoming residents in that it concerned the man who would be hired in 2010 to direct the investing for the Wyoming pension system funds and who would subsequently be named to be their Chief Investment Officer in 2012, a pretty lofty position.
The man has been charged with insider trading dating back to 2008, where he profited to the tune of $136,000. It took the SEC a few years to catch up with him but when they did, and then when the State of Wyoming found out about it, the man not only faced the fury of the SEC for his past actions, he was also dismissed from his current job.
The insider trading violations took place well before he was hired by the State of Wyoming and there was no indication that in his current job he was anything less than honest and upright, nevertheless he was still fired.
No Easy Roads
There are, to the minds of some in modern day life, that ethical consequences are easily erased and forgotten. Actions one day are all too often considered as yesterday’s emails. Such an assumption is a dangerous road to travel.
Without going too hi-tech in this conversation, let’s not forget that nothing is ever truly erased from a hard drive, and an email send into cyber-space or the great “cloud,” can be retrieved by someone, somewhere and somehow. All it takes is some persistence and some passion.
In the case of the former CIO of the pension fund, we must go back to 2008 when he made his illegal trade and not to when he obviously tried to cover his mistake when in 2010 he was hired by the pension fund.
The man is no dummy. Let’s make that clear. If he was smart enough and sophisticated enough to get hired to this highly responsible position for a state retirement fund, he surely did not gain all of his knowledge about investing in just two years. He knew about investing and he knew what he was doing.
The man is no clueless investor. Going back five years, when the man who would eventually become a Chief Investment Officer for a state’s pension fund was gaining $136,000 in profits from insider trading, it is a pretty good guess he knew he was trading on insider knowledge. Even if he had only gained $136, he was still playing with fire. A person this smart and this sophisticated would have long known the rules of insider trading. He would be a big fool to claim ignorance.
The man took an easy road, but not an ethical one.
We should not try to get inside the man’s thought process. It is dangerous to do so, and perhaps unfair. He is paying his price as I once paid mine.
Maybe he thought that no one would ever connect him with an insider deal. Maybe he thought no one was bright enough to think that $136,000 was an unusually high amount of money. In the other end, maybe he imagined that the State of Wyoming was a naïve little state where a bunch of cowboys didn’t understand what insider trading meant.
I will start with a defense of Wyoming; they are a sparsely populated state, that is true but given their wealth of natural resources, banking infrastructure, quality education system and legal and ethical code going back to before their founding, they are hardly naïve. He would not have been hired had they known about his insider trading activities.
And in this day and age, nothing is untraceable and no one, especially the SEC believes that the Tooth Fairy comes by at midnight and leaves $136,000 under a pillow. Indeed, for most all of us, that’s an awful lot of money.
Self-Indulgence
Ethical considerations are not made in an ethical vacuum, and only a person who is very self-indulgent would dare to believe that we can do something ethically wrong and not pay the consequence.
In 2008, the man could have very well said, “You know if I was an unethical man, I would capitalize on this, but I am not unethical.”
However, he was too self-indulgent at the time and too greedy and too snobbish. For you can’t make a decision to gain this much money from a transaction without believing everyone around you is stupid.
It is too late to go back, but it’s not too late to apologize.
It takes courage to apologize and ultimately it takes courage to understand that ethical miscalculations come back to haunt us – every time. His life will change now and after he pays the penalties, he will have a better life.
Good choices will do that.
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