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2009年7月份,我给一个老朋友(Simon FT-MBA,2010春季班)为申请MBA而写的Essay提了几点比较关键的修改建议。后来,她成功拿到Simon的Offer。再后来,她建议我做留学DIY咨询方面的工作,并向我介绍了我的第一个客户。最终,我的第一个客户也成功拿到几个TOP16商学院的面试并顺利拿到Duke Fuqua商学院MBA的录取。 本人毕业于上海复旦大学管理学院国际企业管理系,属于商科科班出身并且做过管理工作、有领导经验的人士。

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留学参考:Bernie Madoff's Message To MBAs  

2017-04-24 02:53:32|  分类: DIY留学综合信息 |  标签: |举报 |字号 订阅

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留学参考:Bernie Madoff's Message To MBAs
 


BY: JEFF SCHMITT ON APRIL 12, 2017

 

 

David Weber has seen it all. The former chief investigator for the Securities and Exchange Commission, Weber has investigated misconduct ranging from cattle fraud to trade secret theft to Chinese military spying over a two decade career in public service. Over that time, he has learned one enduring truth.

“Fraud is only limited by the ingenuity of the perpetrator,” he tells Poets&Quants in an interview. “It is only limited by the capacity to engage in creative thinking.”

Perhaps the most imaginative hustler in recent memory is Bernie Madoff. During the 2008 financial meltdown, Madoff became the face of fraud, orchestrating a Ponzi scheme that bilked investors out of nearly $20 billion. Currently serving a 150-year prison sentence in North Carolina’s Butner Prison Camp, Madoff may seem more like a cautionary tale than a sage at this point. In Weber’s executive and online fraud detection classes, he brings a rogue’s voice to the table. In essence, he is a guide to what can go wrong, pointing out where individuals and organizations are vulnerable and what can be done to stop the perpetrators.

Sound like a replay of Catch Me If You Can, where Leonardo DiCaprio’s Frank Abagnale helps the FBI catch swindlers after paying his penance? Not exactly. Instead, Madoff operates in the shadows, reviewing course materials and answering student questions via email far away. One contribution: He evaluated Weber’s online course syllabus in advance, posting suggestions on what he felt was truly valuable to MBAs.

“He was very focused on the culture as a whole and the lack of understanding in both the accounting and legal professions in particular,” Weber shares.

FRAUD: THE TOPIC THAT DARE NOT SPEAK ITS NAME

Madoff may be the star attraction in Weber’s fraud courses. But once students roll in, it is Weber’s boundless enthusiasm and thought-provoking questions and experiences that leave a lasting impression. The University of Maryland’s Smith School of Business is known for embracing practitioners like Weber. In his courses, students apply real world tools, used by regulators and senior executives alike, to prevent Enron-like chicanery from engulfing their organizations.

While Weber notes that business schools often highlight how to boost revenue and productivity, he argues that intricacies like reporting structures and internal controls are also key parts of MBA education. “Before they get out of the program, students need to understand their personal role in the corporate governance ecosystem,” he notes. This is particularly true for executive MBAs, who may already be part of the chain of governance. “By having a course focused on understanding the roles and responsibilities of each member of the chain,” Weber points out, “MBAs get to pause and think about how each might be designed to perform better when they return to their employers, as well as where problems might occur in their real world jobs.”

His courses, however, begin with students engaging in what seems a heretical exercise: They are asked to think like criminals. “We close our eyes and we think, ‘OK, each of you in this program is an executive or an up-and-coming person within the organization. Ask yourself: How could you do it if you wanted to? How could we circumvent internal controls and what is the worst thing that you could do in your organization?’ Then, ask yourself, ‘what do we need to do to fix it to prevent this from happening?’”

PARTNERSHIP BETWEEN WEBER AND MADOFF STARTED WITH A SIMPLE EMAIL

Bernie Madoff could’ve easily have been checked when he led his namesake investment securities firm. Like most Wall Street operations, he was audited — though his selection of a two-person firm should’ve raised red flags among investors. He was inspected and examined by the SEC five times. Of course, he pitched his knowledge of the securities market to financially-savvy banks, public accounting firms, and individual investors who could’ve easily dug deeper. Alas, there were always whispers in Upper East Side gatherings and Wall Street corridors that Madoff’s numbers couldn’t possibly add up. Still, Madoff was well-liked and well-connected, even once serving as the non-executive chairman of NASDAQ. It was unimaginable that he could be something other than what he appeared to be.

Yet, it was this very failure of imagination that fueled Madoff’s ongoing deception. No one dared ask the hard questions or verify his assertions. That even included the SEC, observes Weber, who cites Ronald Reagan’s classic “Trust, but verify” axiom in relation to Madoff. “They would come and do an inspection. Bernie would be the first to tell you that he had a lot of anxiety and stress because he felt at any moment that he would get arrested and thrown in jail. He would constantly be surprised because nothing would happen. They would never do the DVs (Direct Verifications) that would have caught him a lot earlier.”

Ironically, Weber had directed all investigations at the SEC’s Office of Inspector General, and first reported misconduct in the SEC’s investigation of Madoff. Despite being on opposite sides of the law, Weber and Madoff have developed a sort of kinship. “We have a lot in common, strange as that might sound,” Weber admits. “We share religion. We grew up in the same neighborhood. I’m around the same age as his boys when they were alive.”

 

MADOFF CHOOSES THE TEXTBOOK USED BY MBAs

Madoff hasn’t been an easy man to reach since being incarcerated. The Bureau of Prisons, for one, restricts his contact with the outside world by pre-approving anyone he emails in advance. After he began teaching at the University of Maryland in 2014, Weber received what he describes as an “extraordinary email,” an automated request to his school account to correspond from none other than “Inmate Madoff, Bernard L.” This sparked a long and regular string of communiqués between the two. “He was obviously keeping track of what I was doing,” Weber jokes.

Initially, Weber planned to carve out a guest teaching spot for Madoff, who agreed to take on the role. However, Weber encountered concerns about security with videotaping his lectures. This was then followed by nearly two years of foot-dragging by the Bureau of Prisons, potentially out of fear that Madoff might somehow profit from the venture. Despite this, Weber still found a way to get him involved.

To start, Madoff actually picked out the textbook used by the online MBA class. How did Weber get that one through? Simple: He enlisted the help of the textbook publishers, who sent review editions of selected books to Madoff. After reading all of the books, he settled on the 4th edition of Joe Wells’Principles of Fraud Examination from Wiley Publishing. The choice didn’t surprise Weber, who notes that Wells is a former FBI agent, CPA, PhD, and a past chairman of the Association of Certified Fraud Examiners.

MADOFF A SOUNDING BOARD FOR STUDENTS

Madoff also acts as a sounding board for students in Weber’s MBA fraud classes. Sometimes, online students will pose questions to Madoff, who’ll email back answers for Weber to share. For executive MBAs, Madoff will compose an email for incoming students and Weber will make a photocopy of it for each of the students. Earlier this year, Weber’s online students were discussing the concept of power and how it can be wielded over others. At the same time, a newly-released book claimed that Madoff had cornered the market for hot chocolate, considered the most valuable commodity at his prison.

Seizing on this, students inquired whether the news was true and (if so) how it related to power. After vehemently denying the book’s claims, he went into depth about the various forms of power that can be used to dictate or influence behavior in an organization

“So we had this whole conversation about these various concepts of power and I was able to share it with the students,” Weber says. “Bernie has a lot of time on his hand to think about these things. To have someone like that provide insights about ethics and fraud is extraordinary. It’s extraordinary for me and I imagine it is extraordinary for the students.”

MADOFF’S WARNING TO MBAs…IN HIS OWN WORDS

So what does Madoff have to say about the risk of fraud for MBAs? In March, Weber posed this very question to Madoff in lieu of his interview with Poets&Quants. “In my mind, MBAs are probably the greatest population at risk for fraud or unethical behavior, because earnings pressure is so high,” Weber wrote to Madoff. “Do you have any thoughts on this? Are there things that you think could be added to graduate (or undergraduate) curriculum that could help prevent fraud, or make executives more resilient or resistant to a bad decision impulse? Is there any message or thought that you would like to provide to these executives (or future executives?)”

Madoff’s response, delivered an hour later, is stunningly candid.

David,
You are providing a great service to your students. I for one am a terrific example of what you are talking about. For more than 75 % of my career I served on regulatory committees and as consultants to the regulators worldwide. If I became aware of anything it is how LACKING the understanding of both the accounting and legal profession is regarding the very industry they are trying to monitor and regulate. Quite frankly they are ill equipped to perform their obligations. This is not to in any way imply that their own moral compass is at fault nor I am I in any way rationalizing or excusing my own and the other industry population behavior.  David I was surrounded by every level of investor and business executive and I am convinced that FRAUD is rampant at almost every level. I wish I had the knowledge to somehow change this. I think that the often quoted remark of Michael Douglas in the movie Wall Street that” GREED IS GOOD”. Once again this behavior is not limited to the Business world. Look at our GOVERNMENT. I know I sound bitter. Please excuse my own embarrassment and REMORSE.
regards,
Bernie

IS MADOFF A PSYCHOPATH…OR JUST A TORTURED SOUL?

Indeed, Madoff’s response touches on several key motifs in Weber’s courses. Weber harkens back to the importance of due diligence as the cornerstone of curbing fraud. “Clients don’t always tell you the truth,” Weber laments. “The only way you can be comfortable that the client is telling you something that is true is through verification.” Going hand-in-hand with that is resisting the temptation to make assumptions. “You can be affluent, engaging, charismatic —all the things that Bernie is and was. If a single person anywhere along that chain of events had done a verification, the Ponzi Scheme would’ve collapsed years earlier.”

While Madoff preaches education and conscientiousness these days, some are skeptical that he is a changed man. Over the past decade, it has become fashionable to dub some business executives as psychopaths: a-moral, unfeeling self-servers who climb the corporate ladder thanks to being ruthless, manipulative, and charismatic. In some pop psychology corners, Madoff is lumped into the psychopath category. While Weber admits to being neither a trained psychologist nor a Madoff apologist, he has a definite opinion on the matter.

“I don’t think he is,” Weber says. “The reason is that he is showing remorse. Psychopaths could pretend to show remorse. That’s how they’re able to get ahead — they’re able to mirror the feelings of others. In his circumstance, where he has a 150-year prison sentence, why would he have to mirror anything? He’s not in a place where he needs to curry favor with anyone. I take, to a certain degree, that certain things he talks about, including his own feelings, are somewhat legitimate. He’s not looking for our approbation or approval.”

 

THE RISKS OF FRAUD ARE GREATER THAN EVER

Of course, Madoff, was able to pull off his swindle with low tech computers, a tiny audit firm, a JP Morgan Chase bank account, and the complicity of certain JPMC employees. Could it happen again? With technology becoming increasingly intertwined with all organizational functions, Weber believes the opportunities for wrongdoing have increased exponentially in recent years. One way is through general ledger entries, which previously required the generation of manual ticket that created both an audit trail and a witness. With automation, Weber observes, a change could theoretically be made remotely without manual documentation.

The potential threats from technology are far more than an academic exercise. Circumventing internal controls was also at the heart of the 2012 Libor scandal. Traditionally, securities firms conducted surveillance and required supervision by archiving recorded phone conversations and emails. To get around this, according to Weber, the Libor fraudsters simply re-routed their communication to texts and instant messaging, with the latter requiring the archiving feature to be manually turned on.  Weber notes that all the trading desk phone recordings in the world would not curtail this type of conduct in the digital age. In short, compliance officers must factor rapid changes in technology into any businesses’ risk assessment.

The Libor example also illustrates the risk of unintended consequences with technology. “You have firms where IT people were installing upgrades and they were doing it for the right reasons, to increase automation and productivity,” Weber laments. “This is an example of how you can be brainstorming Section 404 and the worst that can happen and no one in that session would contemplate that instant messaging is going to sink us today. That’s the way that technology has changed compliance. There are little hidden baubles or gifts in every upgrade or every business process.”

THE CHICKEN OR THE EGG: CULTURE OR SYSTEM?

Before taking Weber’s EMBA course on fraud, Jacqueline Manger had poured substantial resources into her compliance systems to combat worst case scenarios at the investment advisory firm she operates. In fact, she treats compliance as a value proposition. She boasts self-regulatory processes that are more robust, in her opinion, than firms that are 5-10 larger than hers. Manger admits that her approach requires more paperwork, but adds that she can supply “every piece of paper the SEC needs within 24-48 hours,” which can give her the benefit of the doubt in a dispute.

That said, Weber’s course took her appreciation for creating a compliance mindset to another level. “When I think about fraud prevention and control, if you’re going to set up a program, inspire your organization to prevent internal fraud and promote compliance culture regardless of your regulatory structure.” Manger also doesn’t buy that compliance is the exclusive purview of just the legal and finance departments either. She suggests rotating different departments through compliance or creating compliance ambassadors in each department. “Having people who are not exactly what you think of involved in compliance is also very helpful as a check.”

Nora Cobo, an online MBA student and executive with a nonprofit organization, came away with a similar impression after taking Weber’s class. “Fraud has potential to pervade everything,” she warns. “It is very easy to get wrapped up in the nobility of what you do, but you need to be vigilant regardless of what field you are in or how large or small your organization is.” However, Manger views such vigilance as a meager bulwark against human nature. “If you have a narcissistic person coming in to be a bad actor, you can have the best compliance culture and I’m not so sure you can really stop those truly evil people from doing what they want to do.”

Luckily, Manger doesn’t see too many people like that. “It is surprising to me everyday that there are not more Madoffs, to tell you the truth,” she concedes. “What it tells me is that the super majority of people in my industry who manage assets and pooled investments and have complete discretion are good players, not bad actors.”

 

WEBER’S WHISTLEBLOWING MAKES NATIONAL HEADLINES

Many MBA graduates have yet to face their moment of truth. Business schools rarely dissect scenarios where their reputations will be publicly maligned after an organization turns its entire machinations against them. Weber experienced this first-hand after he blew the whistle on the SEC in 2012. “I became aware of really, really really significant misconduct, including Madoff, but not limited to Madoff. Also, it has now become public involving the compromise of SEC computer systems by foreign intelligence agencies. I was not willing to go along or be apart of a culture that would cut corners.”

Like most whistleblowers, Weber paid a dear price. The reprisals began with Weber being banned from SEC headquarters after having been falsely accused of disruptive workplace behavior. Eventually, he was terminated, with false and distorted details conveniently leaked to the Wall Street Journal by SEC senior management. While Weber prided himself on his ability to spot risks and anticipate outcomes, even he was shocked by the blowback.

In the end, Weber was fully exonerated. After an outside government review confirmed his claims (and found that he did not engage in disruptive behavior), the SEC didn’t even bother to contest his wrongful termination suit, paying him a $580,000 settlement and reinstating him to his previous position. On the surface, it seems like “all’s well that ends well” story. However, Weber is more the exception than the rule. “It can be very difficult to be protected as a whistleblower,” he admits. “Sometimes, it can take a long time before you’re vindicated. You need to be prepared for the fact that it’s going to be a rough ride.”

ADVICE TO WHISTLEBLOWERS: HAVE A PLAN B (OR C)

Does Weber recommend that others follow his example? For him, it is a matter of conscience. If an MBA decides that they need to do the right thing, he offers one piece of advice: Have a backup plan. “You need a prepackaged, on-the-shelf plan that you can dust off and take out of the playbook. Hopefully that Plan B or Plan C will help you with a somewhat softer landing that what would otherwise be a really rough ride.”

Weber is living proof of this Plan B mantra. A family man, Weber needed to immediately find work after being cut loose by the SEC. Already tarred-and-feathered in the press, it would’ve been difficult for Weber to land a law license in Maryland or the District of Columbia, where fitness and character were part of the criteria. Luckily, Weber had planned ahead, saving him from moving back to New York where he was a bar member. Although Federal government employees aren’t required to hold a DC law license, Weber had paid $1,800 for one years earlier, earning ridicule from his peers in the process. It was an investment that paid immediate dividends. “Because I had a license and paid my dues every year, I was able to be fired and hit the ground running 11 days later.”

This fast start produced Goodwin Weber PLLC, Weber’s boutique law firm that frequently represents whistleblowers and victims of securities fraud.  In just four years of private practice, Weber has won repeated cases on behalf of government and private sector whistleblowers, including awards of attorney’s fees and damages.   “I was very lucky because my case —between the foreign espionage and Madoff — it was significant enough to be covered in Rolling Stone magazine. So there was a lot of public and political pressure on the SEC. Not every whistleblower has that warm wind behind them, however. As such, it is very important to keep faith in the process. “it’s a long road from law to justice,” Weber adds.

Such experiences also reinforced Weber’s belief that business schools should include ethics and whistleblowing as part of their normal curriculum. “Only by addressing the issues directly can we effect change going forward,” Weber notes.

FROM REACTIVE REGULATOR TO PROACTIVE PROFESSOR

After declining to return to the SEC, Weber’s journey took him to College Park, Maryland, where he has embraced the life of an academic. The Academic Director for the Smith School’s graduate certificate programs in Fraud Management and Anti-Money Laundering Management, Weber confesses the transition from regulating financials to teaching executives has sometimes been steep. Notably, his fraud deterrence and business ethics courses have required him to step back and look at issues from an operational vantage point. It is a complex, ambiguous, and dicey interchange, where legal counsel doesn’t always yield unassailable answers and legal and the ethical standards can sometimes be at odds.

“In enforcement and investigations, the only time I saw something was when a problem already existed,” Weber acknowledges. “Now, I’m having to see it from an enterprise risk perspective, where many of these organizations are trying to do everything that’s required but at the same time earn money.”

That’s a fine line, Weber admits, and one that every company defines differently. “Let me use the example of a bank that will remain nameless,” Weber recalls. “A CEO once told a bunch of bank examiners that they wanted to be ‘a bank that was known for always being one step ahead of the regulators on their heels.’ When I heard that, I thought to myself, ‘This is absurd. Here is a CEO who is intentionally saying that they want to walk the line and just be one step ahead of the wolf biting at their heels.’ Now that I am teaching in a top business school, I see it as an operational decision, that they are willing to take risks perhaps where some of their competitors are not.”

Sometimes, the risk doesn’t pay off. Weber cites Wells Fargo as a “catastrophic” example of a firm that couldn’t balance the mission of maximizing profits with the need to minimize risk. “For many years, they were able to show stock analysts that their ratios for new account openings were higher than their competitors and they were rewarded with a higher share price. Knowing what we know today (and based on the performance of the shares since the scandal has broken), I think that was a risk management failure. In the long run, I don’t think it benefitted them financially.”

“ETHICS IS SEXY. FRAUD IS SEXY.”

Weber has also taken well to teaching. In just his third year at the University of Maryland, he earned the Distinguished Teaching Award for both the University College and the Smith School of Business — the second highest teaching award given by the school (and one based completely on metrics). He has also helped to forge a partnership between the Criminal Justice Department at the University of Maryland and the Smith School on a four course graduate certificate program in Risk, Compliance and the Law, which rolls out in the fall. Weber hasn’t finished making news either. Last year, he was one of the two experts selected to help journalists evaluate the Panama Papers, leaked documents that exposed fraud and tax evasion from current and former heads of state and their family members.

For now, Weber has found his place at the Smith School, relishing the chance to affect change through the next generation of business leaders. “You can see the gears working and light bulbs going off above people’s heads in classes like this,” Weber notes. “Everyone has seen fraud. When you’re in an MBA program, these are not young 20 year-old students. You can see that they get it and that the tools they are given, as we sit there, have an actual impact.”

Part of the appeal stems from the content itself, Weber adds. “Most people don’t think ethics will be exciting. The point is, ethics is sexy. Fraud is sexy. Numbers are sexy. Until the minute they get into class, many are wondering, ‘Do I have to take this class?’ What they realize when they get here is that fraud and ethics are about life. It’s about everything in the world. The day they walk out, they’ve got new tools they can put to work immediately. That’s what an MBA program ought to be all about. It’s certainly what it’s about at Smith.”

 

 

以上内容摘自:

http://poetsandquants.com/2017/04/12/bernie-madoff-teaching-mbas-fight-fraud/

 

 

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