Although there's a 0 percent chance of the US Congress enacting universal basic income, techies have launched their own DIY basic income schemes through the distribution of online currencies like Bitcoin.
Rep. Ruth Jones McClendon's persistence seems to have finally paid off this session. In addition to finally getting her long-stalled needle-exchange bill through the House, the San Antonio Democrat appears to have finally won another hard-fought legislative battle. For more than a decade McClendon has filed a bill to create...
At the sentencing hearing for Kareem Serageldin, a former senior executive at Credit Suisse, Judge Alvin K. Hellerstein of the Federal District Court in Manhattan pointedly asked why someone in such a position would engage in misconduct. As DealBook reported, the judge asked, “Why do so many good people do bad things?”
That is the conundrum of many white-collar crime cases: successful business people act in ways that put careers and personal fortunes at risk for seemingly modest gains, and sometimes the misconduct benefits their company but themselves only indirectly.
Mr. Serageldin was the global head of the structured credit group at Credit Suisse, responsible for overseeing its subprime mortgage securities portfolio. He was indicted in February 2012 for inflating the value of bonds held by the bank to cover up losses as the collapse in the housing market hit in late 2007.
As seen in other recent cases, there were recorded telephone conversations in which Mr. Serageldin and other defendants discussed keeping the prices high to protect their positions in the hope that the housing market would turn around. When internal inquiries into the valuations were made, the defendants did their best to cover up what they had done, a losing battle that led the bank to disclose the mismarking in February 2008.
Judge Hellerstein imposed a 30-month prison term, a punishment below the recommended sentence for the violation. In explaining the reason for the reduction, the judge noted that Mr. Serageldin’s conduct “was a small piece of an overall evil climate inside that bank and many other banks.” Credit Suisse disagreed with that characterization, noting that regulators had highlighted the isolated nature of the wrongdoing.
Of course, even if the judge was correct, a corporate culture that puts pressure on employees to cut corners to make their targets is not an excuse for criminal conduct. Was this a case in which the moral compass simply went awry when a person was put in a stressful situation?
If the misconduct is just an aberration, then that may support the proposition that crimes by these types of individuals really cannot be deterred because they have convinced themselves that the conduct is not “really” wrong, or at least they will be able to make things right at the end of the next quarter. If you do not believe you are doing anything illegal, then there is no fear of punishment.
Perhaps misconduct by some groups can be ascribed to the belief that so long as everyone else seems to be doing something, it cannot actually be wrong. Continuing investigations into global banks’ manipulation of the London interbank offered rate, or Libor, as well as foreign currency exchange rates are replete with examples of traders exchanging information and boasting of their ability to artificially raise or lower a benchmark rate. These are not isolated instances, but part of a pattern of conduct over months and even years. So it cannot be chalked up to the heat of the moment.
What is so puzzling about people who have led otherwise good lives is that they are unlikely to have engaged in the misconduct if it is presented to them in stark terms. Ask a Wall Street trader, for example, whether he or she would trade on material nonpublic information received from a corporate insider, and the answer from most would be “no” — at least if there was a reasonable chance of being caught.
But under pressure to produce profits for a hedge fund or a bank, traders are often on the lookout for an “edge” on the market that can slowly take them closer to crossing the line into illegality. Add to that the vagueness of the insider trading laws in determining when information is “material,” and it can be easy to cross into illegality without necessarily noticing it.
The current trial of Michael S. Steinberg, a former senior portfolio manager at SAC Capital Advisors, puts the firm’s culture on display and raises the question about how far traders are willing to go for that edge on information. A former SAC analyst, Jon Horvath, is expected to testify about how he obtained inside information and passed it along to Mr. Steinberg, claiming they both knew it had been improperly obtained. But in the fast-paced environment of securities trading, do those buying and selling pause to ask whether they have come close to the line, or maybe even crossed it?
Perhaps the most inexplicable insider trading case involves Rajat K. Gupta, formerly head of global consulting firm McKinsey & Company and a former director of Goldman Sachs who was convicted of tipping Raj Rajaratnam, the founder of the Galleon Group hedge fund, about impending developments at Goldman. He is appealing the conviction, and a separate order in a civil enforcement action brought by the Securities and Exchange Commission permanently barring him from serving as a director or officer of a public company.
Mr. Gupta did not make any money from his actions, and before sentencing, his lawyers argued that the conduct represented an “utter aberration.” In imposing a two-year prison sentence, Judge Jed S. Rakoff of the Federal District Court in Manhattan said he had “never encountered a defendant whose prior history suggests such an extraordinary devotion, not only to humanity writ large, but also to individual human beings in their times of need.”
When looking at Mr. Gupta’s case, Judge Hellerstein’s question about why such a good person would do bad things looks to be unanswerable.
That does not mean that good people should avoid punishment just because they have lead otherwise exemplary lives. But it does raise questions about how much punishment is appropriate for someone who has lost so much, and about how to ensure that people do not cave in to the pressure to engage in misconduct.
As Judge Hellerstein pointed out in sentencing Mr. Serageldin, “Each person has to look within himself and ask himself what is right, what is wrong.” White-collar crime cases too often involve defendants who never seem to have asked such questions.
Peter J. Henning, a professor at Wayne State University Law School, is the author of “The Prosecution and Defense of Public Corruption: The Law & Legal Strategies.” Twitter: @peterjhenning
Any fine above $2 billion against BP for the Deepwater Horizon disaster would be “extraordinary and severe,” double the highest-ever U.S. water-pollution fine and potentially crippling its American oil business, BP said in court documents.
"Michelle Alexander, a civil rights lawyer and law professor at Ohio State University, argues in “The New Jim Crow: Mass Incarceration in the Age of Colorblindness” (2010) that the mass imprisonment of black men since the 1980s has taken the place of Jim Crow as American society’s main way to control black men - just as Jim Crow itself took the place of making them slaves.
While blacks and whites sell and possess drugs at about the same rate, guess who is filling up the prisons under these drug laws? Mostly black and Latino men, particularly those from poor neighbourhoods. In some states as many as 80 to 90% of those found guilty of a drug crime are black men. But the Supreme Court sees no racism in that."
Seems like they're doing it wrong then. Sniffer dogs are often deployed at the constriction points in the supply chain. This disrupts delivery of the product and shouldn't target many low level offenders....
In the 1960s, a gang of variously disaffected youth sprang up in Hawkes Bay, New Zealand. They didn't ride bikes, but they quickly developed all the trimmings of an outlaw motorcycle club: patches, club colors, and a fiercely violent process of initiation. They came to be known as the Mighty Mongrel Mob and today they're the largest gang in the country, with around 30 chapters across both islands.
Media access to the Mob is rare, which is why this photo series by Jono Rotman is kind of a big deal. Jono, who is a Wellington born photographer now living in NYC, cut his teeth capturing New Zealand's prisons and psychiatric wards, before he took on gang life in 2007. We asked him how he convinced hardened gang members to sit for large format photography, and what he learned along the way.
Rob Duke's insight:
The first place I went to was in Porirua to photograph Denimz, the guy with the dogs on his cheeks. That's a largely Pacific Islander and Maori area with a lot of state housing. Denimz's place is nice though, he's got a good family and he's a well-organized guy. I think as they get older their outlook gets wider: it's less about turf war, and more about the health of their community. When we met I tried to speak as directly as I could.
<I had the same experience dealing with the Bulldogs in Fresno. If you take the time to learn their world view, it has definite undertones of protecting the community. The turf war is just to keep outsiders from preying on the community.>
OK, to start with "empathy" (The ability to understand and share the feelings of another), is not "sympathy", (feelings of pity for the misfortune of another), with which it is often conflated...
So, in conclusion, while empathy is one of Stephen Pinkers “Better Angels of our Nature”, it is a minor player, with a distinctly dark side, whose role has been misunderstood due to an erroneous belief that through mirror neurones we can share another’s experience. In truth, empathy’s darker side, can be instrumental in committing atrocities, and even when benign is akin to sentimentality: weak, prejudicial and limited in range.
For more on this process, see Manfred Kets d'Vries work on Folie a deux. This is the ability for charismatic leaders to somehow get followers to share in their lunacy (see Hitler, Jim Jones Cult, Charles Manson Family, etc.).
Tomorrow Silk Road founder Ross Ulbricht will be sentenced. He faces the possibility of between 20 years to life behind bars because drugs were bought and sold on his website. The prosecution is painting him as a major drug dealer and blaming him for the deaths of six people who overdosed (without acknowledging that our current drug policies lead to 35,000 accidental overdose deaths per year).
Brace yourself: The average American worker needs to earn $19.35 an hour to afford rent for a standard two-bedroom apartment. That’s more than two times the current federal minimum wage. Weeping into your laptop yet?
In some of the drought-stricken region's minority communities, young people suffer from hopelessness that drives them to join criminal organizations run by men living in prisons hundreds of miles away.
Rob Duke's insight:
My last Chief's posting was in Fresno County just below this area...
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