Tag Archives: ethics

The Rise of the Rogue Executivve

rre The Rise of the Rogue Executive: How Good Companies Go Bad and How to Stop the Destruction is a hard-hitting book by Professors Leonard Sayles and Cyndia Smith. The book takes a strong stand against the lack of ethics in contemporary American businesses.  It describes, in great detail, the ethical lapses committed by American businesses in the last few years. The authors’ case is that the rogue executive is not an exception at the upper, or lower, echleons of American business, and many sections of our society must accept responsibility in the prevalence of white collar crime. The authors’ critique the role of business schools, press and journalists, investors, regulators, Congress and governments, auditors and consultants, and the larger public in supporting and encouraging unethical business practices. The book concludes with a discussion of how the authors believe things can be fixed and changed.

The book was written long before many of the unethical business practices that occupy the front pages of our newspapers today occured: Bernie Madoff’s largest Ponzie scheme, the fall of Satyam founder Ramalingam Raju. Messers Sayles and Smith provide an in-depth examination of some of the things that are wrong with American businesses today, and many of the issues they discuss apply equally well to businesses in many developed and emerging economies  that are imitating (or at least trying to imitate) American capitalism. The one major shortcoming of the book is repetitiveness- Examples are repeated in different places in the book and parts of the book seem very similar to other parts. Despite such drawbacks, the book is a must read for anyone interested in understanding and improving business ethics.

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The Pretender (2002)

 The Pretendor: How Martin Frankel fooled the financial world and led the feds on one of the most publicized manhunts in history is a book about Martin Frankel, a self-taught U.S. stock-broker, by Ellen Joan Pollock. The book describes the rise of Martin Frankel from an unemployed nerd who lived in his parent’s basement to a global businessman who hobnobbed with celebrities and politicians in US and Europe. It describes how Frankel, who did not like to leave his Greenwich (Connecticut) mansion, cheated investors of more than $200 million all over the country. It vividly describes the sex life of a perverted man who ‘obtained’ women from all over the US and many other countries of the world to build himself a modern-day harem. It discusses the financial decline of Martin Frankel and his eventual arrest in Germany when one his girl friends betrayed him to the feds.

Martin believed he was a genius at identifying stocks which could give better returns than what Warren Buffet was able to have. Unfortunately, Martin was never able to make the decision to invest (or divest) stocks. He believed he had ‘trader’s block’, a psychological barrier that prevented him from making trading decisions. Despite his alleged brilliance in identifying high-growth stocks, martin Frankel obtained his fortune from his acquisition of financially-troubled insurance companies which sold insurance policies to senior citizens through family-owned funeral homes in southern states such as Tennessee and Mississippi.

In the book, Martin Frankel is repeatedly described as a modern-day Howard Hughes (they were both eccentric millionaires and shared a common obsessive fear of germs). Martin Frankel was sentenced to a 17 year prison sentence after his arrest and continues to live in infamy as an admitted perpetrator of one of the largest insurance scams in American history.    

The book is worth reading, especially if you can overlook the somewhat unnecessary description of Martin Frankel’s sexual adventures.

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