¿Do you have any questions regarding the quiz?

This is the link to our textbook. You see the chapter box on the top left handside. Look for chapter and you get essay questions, tutorial quiz, etc.

Watch out for mini-Madoffs!

From the NYTimes: On Monday, at a suburban New York train station, Nicholas Cosmo surrendered to federal authorities in connection with a suspected $380 million Ponzi scheme, in which investors paid a minimum of $20,000 for high-yield “private bridge” loans that he had arranged. Mr. Cosmo promised returns of 48 percent to 80 percent a year, and none of his investors apparently minded — or knew — that Mr. Cosmo had already been imprisoned for securities fraud. In the end, 1,500 people gave him their money, often through brokers who worked on his behalf.
______
In Florida, not far from the Palm Beach clubs where Mr. Madoff wooed some of his investors, George L. Theodule, a Haitian immigrant and professed “man of God,” promised churchgoers in a Haitian-American community that he could double their money within 90 days. He accepted only cash, and despite the too-good-to-be-true sales pitch, he found plenty of investors willing to turn over tens of thousands of dollars. “The offices were beautiful, and I was told it was a limited liability corporation,” said Reggie Roseme, a deliveryman in Wellington, Fla., who lost his entire savings of $35,000 and now faces foreclosure on his home.

Florida fund manager surrenders

$300 million fund with total assets of less than $1 million.

PHI 2604 Chapter 3: Homework

1. “Justice” is usually defined as fairness. Is there a more detailed explanation based on today’s affairs?
2. What is the best way to cut the fiscal pie? Explain.
3. How would utilitarians do it? Cite Mill’s example of “talented workers.”
4. What would “worker participation” and “greater equality of income” mean for Mill?
5. What is the libertarian approach to justice? Define Nozick’s “entitlement theory.”
6. Explain Nozick’s other two principles.
7. Clarify Rawls’ idea of justice. Cite his two main principles.
8. Within Rawl’s theory, define:
a) Nature of choice
b) Veil of Ignorance
c) Choosing principles

More fraud1... (watch out)

Also from NYTimes: The head of Satyam Computer Services confessed to making up more than 10,000 employees to siphon money from the software company and to using his elderly mother’s name to buy land with the cash, a prosecutor said in a court appearance Thursday.
___________
¹The offense of deliberately deceiving another in order to damage them – usually, to obtain property or services unjustly. Fraud occurs when: 1- Income is overstated, assets are overstated, collateral is overstated, the length of employment is overstated or fictitious employment is reported, and employment is backstopped by conspirators. 2- The borrower's debts are not fully disclosed, nor is the borrower's credit history, which is often altered. Often, the borrower assumes the identity of another person (straw buyer). 3- The borrower states he intends to use the property for occupancy when he/she intends to use the property for rental income, or is purchasing the property for another party (nominee). 4- Appraisals almost always list the property as owner-occupied. Down payments do not exist or are borrowed and disguised with a fraudulent gift letter. The property value is inflated (faulty appraisal) to increase the sales value to make up for no down payment and to generate cash proceeds in fraud for profit.

Politics and crime

In the NYTimes, former senate majority leader Joseph L.Bruno was indicted on Friday on charges that he reaped millions of dollars from companies seeking business from the state or from labor unions, capping a long-running investigation into one of New York’s most powerful political figures. Mr. Bruno is accused of collecting more than $3 million over a 13-year period, beginning in 1993, from a handful of businessmen seeking state contracts and grants, as well as contracts to manage pension fund investments for at least 16 labor unions.

Is torture Ok?

An important element in the discussion we had last night (with the Wednesday night class) about torture here.
______
Wikipedia has a good entry on torture.
_____
The Wall Street Journal calls it the "Jack Bauer Exception." To wit, effective immediately, the interrogation of anyone "in the custody or under the effective control of an officer, employee, or other agent of the United States Government" will be conducted within the limits of the Army Field Manual. That includes special-ops and the Central Intelligence Agency, which will now be required to give prisoners gentler treatment than common criminals. The Field Manual's confines don't even allow the average good cop/bad cop routines common in most police precincts.

Bad News

We'll start the class with HW and brief discussion of some "bad news," generally involving ethical violations and crimes in the workplace, such as drug use in the workplace, deception, job discrimination, whistle blowing, sexual harassment, fraud, bribes, conflict of interest, etc.

Dick Fuld Exposed

On September 15, Lehman Brothers Holdings filed in New York for chapter 11 bankruptcy protection. An institution with total assets of $639 billion – more than the gross domestic product of Argentina and roughly 10 times the size of Enron when it filed for bankruptcy protection in December 2001 – had gone up in smoke.The man in charge: Dick Fuld.

More Ponzi!

Watch out!

The US Securities and Exchange Commission (SEC) charged a fund manager based in the Philadelphia area with operating a $50 million Ponzi scheme, in which he paid off early investors with money from later investors.

In a joint filing, the SEC and the Commodity Futures Trading Commission allege that Joseph Forte, 53, reported consistently strong results to as many as 80 investors even though he routinely lost money, withdrew millions of dollars in personal fees and used recent investors’ contributions to repay earlier backers.

More Madoff

More revelations about Bernard Madoff's scam in the NYTimes. Did Madoff's brother Peter had an obligation to disclose Bernard's confession to him (the evening before he confessed to his sons)?

Some places to gather interesting news

Here is list of places you can get "bad" news from:

CNN's Money
Wall Street Journal
MSN Money

Another one of Madoff's victims

On CNN about another one of Madoff's victims: She used to lunch at the exclusive Four Seasons. Now the best-selling author jokes that she's inviting friends to Taco Bell. Call it gallows humor, but Alexandra Penney has just lost her life's savings. She invested every penny with accused Ponzi-schemer, Bernard Madoff. Penney thought she had weathered the bear market just fine, since Madoff put her money in super-safe Treasuries. Then on December 11, she received a call from her best friend.