Ethics

http://online.wsj.com/article/SB10001424052748704587004576243042477019926.html?mod=WSJ_hp_LEFTTopStories

It seems that some people never learn. Barry Minkow, the fraudster who gave us ZZZZ Best, is likely headed to prison for another extended stay. As if 7 years the first time around wasn't enough, he could get up to 5 more. What happened this time? Minkow started a company that would look for undiscovered fraud at companies, and then short sell them after announcing his findings. As long as the trading came after the announcement, I don't see anything wrong with this; in fact, it seems pretty savvy.

What happened this time, though, is that in the case of Lennar Co, Minkow just straight-up lied. Although he lead investors to believe that there was serious fraud at Lennar, that was not the case, and it seems that he did this knowingly, which is the key. Minkow personally benefited from disseminating information that he knew to be incorrect and caused harm to the financial well-being of another company and individual.

Minkow, just like the rest of us, needs to learn the line between "brilliant strategy" and "purely self-interested and illegal fraud." We are not above the law, and we should not act like it.