We met a successful and well-known business person whose success had fed an oversized ego. Shortly after, he was found guilty of insider trading and sent to jail. What a waste.
A couple of years ago a friend asked Dave and me if we would join him and his friend and colleague for dinner when we were in New York City on business. We had heard about this person on a number of occasions and had time available, so we graciously accepted. Our friend was taking an international flight out of JFK that evening, so we arranged a very early dinner at a Midtown hotel restaurant named Gilt. The staff showed us to our table in the middle of the restaurant and discreetly continued to set up the restaurant around us. Oddly, a few minutes after we arrived at 5:30 p.m., another couple was seated at an adjacent table. I found it odd because there were so many other available tables where they could have been seated so that we and they could have had some level of privacy for our conversations in the empty restaurant that was devoid of other ambient noise.
Entertaining dinner
As was promised, the individual was very engaging. He laughed easily and had an endless stream of stories to illuminate any point that arose. He clearly was in his element, consuming the majority of the conversation. Dave and I quickly understood our role in the dinner – largely listening to his stories and insights (and later it became evident that we would be called upon to pay). Many of the tidbits that the person shared related to public technology companies, which were, of course, of interest to us. We appreciated understanding how companies gained and maintained their edge as we were building our own technology company away from the mainstream of Silicon Valley. He casually dropped the names of CEOs and other executives throughout the conversation.
One thing became apparent about this individual early on – his success (and it was considerable) had fed an oversized ego. Sprinkled liberally throughout the conversation were bald statements about his lifestyle and wealth, so much so that I felt prompted to ask him his net worth (and I do recognize how inherently rude that question was, but the circumstances made it impossible for me to NOT ask). I was curious if he would actually answer the question or deftly side-step it. Not surprisingly, he answered and told me what many published reports had indicated as I did my research prior to the meeting. At various times, I felt that his loud voice did not match the sensitivity of the subjects we were discussing, but it was his indiscretion, not ours, so we carried on.
While we enjoyed the food and the conversation, we left the dinner meeting unsure exactly what its purpose was. We certainly had made a connection, but there were no action items discussed nor any follow-up proposals made. Dave and I chalked it up to an experience that, while interesting, wasn’t going anywhere.
Insider trading
Then a short two months later, newspaper headlines around the world screamed his arrest for insider trading. The charges came as a result of a sustained investigation by the SEC. Recordings were offered as evidence at his trial that allowed an inside look at his business dealings. With the benefit of hindsight, it seemed obvious to us that the couple seated at the next table at Gilt were likely investigators more intent on eavesdropping than a nice, early meal. His cavalier attitude and loud voice bellowing his wealth and success could well have been a taunting gesture to people he may have suspected of investigating him as he claimed to have known about government interest in his affairs on the recordings.
The government mounted an intense case against him, and he was found guilty of insider trader. He has landed in jail and will be there for some time. There never has been an admission of guilt, no repenting his behavior – just an aggressive defense and technical challenges to the government’s case.
Above the law
This was a great learning experience for Dave and me. Through the rambling meeting we got to see the ego and vanity of a man who clearly thought that he was above the law. At the time we thought that it was just extreme bragging. Never having been exposed to that type of behavior, we were both intrigued and entertained. The charges overlaid a sobering view – this was a man who thought that he was beyond the reach of the law and that rules for others were not rules that could constrain him and his success.
Reflections
In many ways it was sad to reflect on his fall. By all accounts, he was brilliant and driven. He could likely have been incredibly successful without the excesses that put him on the wrong side of the law. He could have saved his family from the humiliation of the trial and his jail term. He also could have saved his friends and business acquaintances who got caught up in his scheme to varying degrees.
We wonder what he thinks about the choices he made and the actions that he took. Are we all susceptible to these temptations if the prize is big enough? I have thought not, believing that most don’t give serious consideration to activities that fall on the wrong side of the law or ethical behavior. But then another case emerges, another person tries to get away with one scheme or another and the fall from grace happens all over again.
There are no winners in a case like this, only examples. His name (and his family’s name) will forever be linked to a successful prosecution of insider trading, overshadowing any other accomplishments that he may have in his lifetime. What a waste.
