Friday, March 17, 2006

Disinfecting Guilt

Bear Stearns finally settled with the SEC regarding allegations of impropriety in respect of their alledged facilitation of "mutual fund trading" by certain of their preferred hedge fund clients. The fine was seemingly large, but no one will do "hard time", for which they must be thanking their stars that the SEC won the juridictional battle with Manhattan-based US Attorney, Eliot Spitzer. More interesting perhaps, was that as part of the USD$250,000,000.00 settlement, Bear Stearns followed the pattern so cynically typical in the Securities Industry whereby they "neither admitted nor denied guilt". But surely it is really a "black and white" question: did Bear Stearns (i.e. their management and employees) knowingly facilitate the illegal (yes, criminal) activity of their customers in the perpetrating of fraud against longer-term holders of mutual funds in which their customers' traded?

Sometimes practices become commonplace such that people no longer question how or why they evolved. But how has "being able to pay-up, but not 'fess up" to criminal activity become so accepted? Why should securities companies be absolved of having to admit guilt when the rest of our American society is theoretically held accountable in our lives and work? Have we really benefitted from civil (and ocassionally criminal) case settlements that allow a defendant to duck and cover with such an unswervingly ambiguous and privileged treatment of guilt? Is not the payment of USD$250,000,000 dollars a rather ostentatious statement of where on the side of right or wrong one sits? Has our society become so monetized and divorced from principle that even the disposition of criminal charges can be wiped clean by money?

Perhaps I will try this tactic the next time I am stopped by the State Police for speeding since it has many obvious advantages such as NOT accumulating points on my driving record and NOT having to report such infractions to my automobile insurer who might raise my insurance premiums accordingly. "Yes officer, I understand you believe I was speeding. I'll gladly pay the fine to avoid the besmirchment of my name, but let it the record read that I neither admit nor deny guilt...." With such moral permissiveness in respect of guilt, it is no wonder there is such a contagion of cuplability afflicting of people like Lay, Skilling, Scrushy, Rove, and yes, I. Lewis "Scooter" Libby cynically exclaiming: "!?!"

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