By Merrie Spaeth, KERA 90.1 commentator
Dallas, TX – While the line - by their words, ye shall know them - may be biblical as well as poetic, it also gives us insight into how our major enterprises think, and behave ... and frequently, it's not good news. I'm Merrie Spaeth for KERA Marketplace Middays.
This week, "they said it" looks at college sports and investment banking. In other words, very big businesses ... which only appear worlds apart. Georgia basketball coach Jim Harrick has some unenviable stats: all four of his incoming players have been declared ineligible. The usual reasons ... all involving deception. The coach's response? It's all "a blip on the screen."
Next: it's old news that analysts pushed stocks - to people like us - while their organizations were making huge fees from these same companies. E-mails showed these same analysts were referring to these stocks as 'dogs' and mocking our naivety, yours and mine. And, you've now seen or heard the protestations of these same organizations that they've changed their ways, blah blah. Citigroup and its subsidiary, Salomon, even took out ads saying they wanted to rebuild investor confidence and had strict new rules that would protect analysts' independence. Sounds great but they just fired Kenneth Boss. Salomon was promoting three companies and he rated them neutral or risky. His superiors pressured him, read the report off his computer in contravention of their own rules, then they fired him - their first excuse was the report was late. 'Course it wasn't due until three days after he was fired. Then, they charged he hadn't voiced his concerns about the pressure through 'proper channels' (I can see why...), then they issued what we call a BIMBO denial, saying "There was no pressure from investment bankers on Mr. Boss " We call these BIMBOs because - like the young woman who announced, "I am not a BIMBO," we believe the opposite of what Salomon said.
Both these examples illustrate that our major institutions still don't get it. The coach doesn't realize that this so called 'blip' is indicative of a blatant disregard for academic standards. He, and Salomon, still think they are playing by the old rules. And we - the fans, the investors, the little people - pay the price. I hope all the appropriate regulators are listening, and feeling hungry. For KERA Marketplace Middays, I'm Merrie Spaeth.
Merrie Spaeth is a communications consultant in Dallas.