David Sokol and Wall Street's Golden Rule: If It's Not Illeg

by Derek Loosvelt | March 31, 2011

Irrespective of what "Holy" Lloyd Blankfein might believe, or what Jamie "Please Stop Calling Us Poor Little Bankers Not-Nice Names" Dimon thinks, it's becoming increasingly obvious that godliness is not synonymous with big-time banking, investing or trading, nor will it ever be as long as rules and regulations governing the world of high finance are influenced by financial firms' lobbyists, and as long as greed continues to get in the way of ethics.

Exhibit W came yesterday, in the form of Warren Buffett's number two man "resigning" from Berkshire Hathaway due to some shady trades, if not illegal, that significantly fattened his own pockets.

By now you've likely heard many of the details surrounding Davey "Lube Me Up With Some Lubrizol Stock" Sokol's dealings that led to his exit from the Warren Buffett empire, thus removing his name as possible Buffett successor. (Rest assured, if you have not read or heard about Sokol, you will in the coming days).

The revelation of Sokol's shennanigans reminds me of what was said yesterday at Vault's CSR Conference. During the event's panel discussion, former CEO of Seventh Generation Jeffrey Hollender pointed out that "We've become so confused about what's right and what's wrong because we've made unethical things legal. We've said it's okay to do things even if they're unethical."

Sarah Murray, a British journalist for the Financial Times who also sat in on the panel, explained that in the U.S., rules and regulations determine what's "ethical" and "unethical." If a certain action isn't covered by a rule, she said, then it's deemed okay.

Other panelists -- BofA Merrill Lynch VP Stephen Fenichell and The Responsible Business' author Carol Sanford -- agreed that the financial system is broken.

In the case of David Sokol, although he might never be convicted of wrongdoing (the SEC is currently investigating his trades), it seems likely that he acted in a wholly unholy manner.

(DealBook: The Curious Case of Sokol’s Departure)

(Related: BofA Chairman Chad Holliday Speaks at Vault's CSR Conference)

Filed Under: Finance


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