As we await the verdict in the insider-trading trial of Raj Rajaratnam, the founder of the Galleon Group hedge fund, the following question comes to mind: Why would people who seem to have it all — wealth, prestige, powerful jobs and infinite access to others with the same — risk that, and more, to provide inside information to the Sri Lankan-born billionaire?
What could possibly have possessed Rajat Gupta, for instance, the former head of the prestigious consulting firm McKinsey & Co., to finish up a Goldman Sachs board meeting and within 23 seconds — according to tapes played at the trial — call Rajaratnam to share with him material, non-public information about Goldman’s financial performance? Why did Robert Moffat, an I.B.M. senior vice president and a leading contender to succeed Sam Palmisano as the company’s chief executive, and Anil Kumar, another senior executive at McKinsey, do many of the same things? (The two have pleaded guilty to various charges stemming from insider trading; Moffat has been sentenced to six months in prison, while Kumar is awaiting his sentence.)
Or for that matter, why would David Sokol, a multi-millionaire and one of the men on the short list to succeed Warren Buffett, bother using the knowledge he had that Buffett was interested in buying Lubrizol, a large chemicals company, to make an extra $3 million that surely would have no effect on his lifestyle? (The Securities and Exchange Commission is reportedly investigating Sokol’s trading in Lubrizol but no charges have been filed against him; he has resigned from Berkshire Hathaway, Buffett’s company.)
Why can’t people who seem to have so much simply be satisfied with what they have, without feeling the need to risk breaking the law to get even more? These men are in a separate category from scoundrels like Bernie Madoff, Marc Dreier and Robert Allen Stanford, who perpetrated ongoing deceit. The former group of men played by the rules for years, which is what makes their questionable behavior so fascinating.