As if Madoff had fled the country: the WIrecard scandal

Wirecard committed ′elaborate and sophisticated fraud′ say ...

In Germany the financial press is sorting through a scandal that Americans might naturally see as a cross between Enron and Madoff, the matter of Wirecard.

Wirecard was a Bavaria based payment processing company founded back in 1999, the pinnacle of all things "dotcom." It was known as "InfoGenie" at first, though that changed to the name I'm using in 2005.

Fast forward: on June 25, Wirecard filed for insolvency, and announced that close to 2 billion euros (that would be about 4.3 billion US dollars) thought to have been in its corporate treasury were "missing."

Its CEO, Marcus Braun, was soon arrested. Apparently there was a scheme among various honchos to funnel money out of the corporate accounts and into their own. COO Jan Marsalek, who is alleged to have been central to this scheme, skipped town ahead of the posse (if I may use an Americanism in this context).

This gave the scandal something that US financial scandals almost never have: a chase. Recall that Bernie Madoff was turned in by his sons, and was apprehended quietly at home, telling the detective who came for him, "there is no innocent explanation."

As to Enron, the only flight there was a flight from life itself. Kenneth Lay died after his conviction but before he could be sentenced.

American business execs and stock swindlers seldom flee the country, probably because they have good reason to believe that, however red-handedly they have been caught, their odds are better if they stay, hire a top white-collar lawyer with their ill-gotten gains, and look for a loophole, or at least work for a minimal sentence.

In Germany, apparently, the threat of prison, and for a long time, was serious enough for our friend Marsalek to take it on the lam. There was speculation that he was in the Philippines for awhile. Coincidentally that country was the site of the banks where the corporate Treasury money was supposed to be. But wasn't. Then there were reports he was in the Ukraine. Then in Russia. Or passing back and forth between the two (the border is porous).

I love a good chase scene.

A Story About Coleridge

This is a quote from a memoir by Dorothy Wordsworth, reflecting on a trip she took with two famous poets, her brother, William Wordsworth, and their similarly gifted companion, Samuel Taylor Coleridge. We sat upon a bench, placed for the sake of one of these views, whence we looked down upon the waterfall, and over the open country ... A lady and gentleman, more expeditious tourists than ourselves, came to the spot; they left us at the seat, and we found them again at another station above the Falls. Coleridge, who is always good-natured enough to enter into conversation with anybody whom he meets in his way, began to talk with the gentleman, who observed that it was a majestic waterfall. Coleridge was delighted with the accuracy of the epithet, particularly as he had been settling in his own mind the precise meaning of the words grand, majestic, sublime, etc., and had discussed the subject with William at some length the day before. “Yes, sir,” says Coleridge, “it is a maj...

Searle: The Chinese Room

John Searle has become the object of accusations of improper conduct. These accusations even have some people in the world of academic philosophy saying that instructors in that world should try to avoid teaching Searle's views. That is an odd contention, and has given rise to heated exchanges in certain corners of the blogosphere. At Leiter Reports, I encountered a comment from someone describing himself as "grad student drop out." GSDO said: " This is a side question (and not at all an attempt to answer the question BL posed): How important is John Searle's work? Are people still working on speech act theory or is that just another dead end in the history of 20th century philosophy? My impression is that his reputation is somewhat inflated from all of his speaking engagements and NYRoB reviews. The Chinese room argument is a classic, but is there much more to his work than that?" I took it upon myself to answer that on LR. But here I'll tak...

Recent Controversies Involving Nassim Taleb, Part I

I've written about Nassim Taleb on earlier occasions in this blog. I'll let you do the search yourself, dear reader, for the full background. The short answer to the question "who is Taleb?" is this: he is a 57 year old man born in Lebanon, educated in France, who has been both a hedge fund manager and a derivatives trader. He retired from active participation from the financial world sometime between 2004 and 2006, and has been a full-time writer and provocateur ever since. Taleb's writings for the general public began where one might expect -- in the field where he had made his money -- and he explained certain financial issues to a broad audiences in a very dramatic non-technical way. Since then, he has widened has fields of study, writing about just about everything, applying the intellectual tools he honed in that earlier work. As you might have gather from the above, I respect Taleb, though I have sometimes been critical of him when my own writing ab...

Jamesian Philosophy Refreshed

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