Businessmen don't know real meaning of the word shame



The ancient Japanese art of hara-kiri has rather fallen out of fashion in recent years, which strikes me as rather a pity.

You will recall that it was a ritual act of disembowelment, beloved of Samurais, who preferred to die with honour rather than be taken prisoner.

For some, it was a form of punishment meted out to those who had broken the bushido honour code. For the rest, it was an action taken if they thought they had brought shame on themselves, their friends or family.

Here is how it worked: the fellow who decided that the time had come would invite a few friends and observers over, then whip out a short knife and plunge it into his abdomen, moving the blade from left to right in a slicing motion.

It must have been with a sinking feeling that one attended such an event and presumably you needed a strong stomach to watch.

The first record of this brutal act occurred during the Battle of Uji in the year 1180, with the last one taking place as recently as 1970. The author Yukio Mishima tried to incite the armed forces to stage a coup d'etat. When they refused, Mishima pulled out his knife and set to work, finally breathing his last when one of his conspirators chopped his head off.

To the best of our knowledge such a radical step has never been taken in financial circles, although it is said that during the Great Wall Street Crash brokers jumped out of windows when they realised the extent of their losses. Some days you couldn't turn the corner of Broad Street for fear of a jobless jobber landing on your head.

Alas, the days of defenestration are over. If you get into trouble these days, you either blame everybody else as Bernie Madoff has been doing from his prison cell, or you refuse to testify, like Raj Rajaratnam, the boss of the hedge fund Galleon Group.

Prosecutors accuse Mr Rajaratnam of making US$63.8 million (Dh234.3m) between 2003 and March 2009 by trading on tips from a network of highly placed corporate insiders.

While his lawyers produced a bewildering set of graphs and documents, prosecutors produced wiretaps including a call between Mr Rajaratnam and the former trader Danielle Chiesi.

The two are heard discussing someone else's purchase of shares in the chip maker Advanced Micro Devices.

"That's a very bold move to make unless you know what we know," says Ms Chiesi. It is the prosecution's boast that what she knew was Mubadala Development, a strategic investment company owned by the Abu Dhabi Government, was planning a bid for the company.

"Look, the other thing is this right, it's been widely speculated. What people don't know is the time," replies Mr Rajaratnam on the tape. "I think it's the seventh." The deal was announced a week later, on October 7.

He has been charged with 14 counts of conspiracy and securities fraud in what prosecutors have described as the biggest investigation of insider trading in decades. The jury is now considering his fate.

To date, 19 out of 26 people charged in the Galleon case have pleaded guilty. Mr Rajaratnam vowed to clear his name at trial but rather than answer his accusers, he has taken the option of remaining silent, as his legal fight

"This defence is controversial, but not frivolous," opined BreakingViews, part of the Reuters news agency. "It paints a picture of a diligent, if aggressive, investor.

"Only one of the jury members has to buy it to spare Rajaratnam. And even if none of them does, the judge might - and he has discretion to lighten any sentence."

Who knows how a Samurai would have reacted to the shame of headlines and reports of evidence Mr Rajaratnam has been subjected to. But financiers are made of sterner stuff. They hire expensive lawyers who do the talking for them. Then they shut up.

As Anthony Barkow, a former prosecutor in Manhattan told Bloomberg News: "When you're caught on a wiretap making powerfully incriminating statements, it's very difficult to testify. He can try to challenge the tapes by saying he meant something else but that usually doesn't work."

The jury may yet acquit Mr Rajaratnam and we must conclude that his investments were just good luck and good due diligence.

A good friend of mine told me that he imposed only three rules on his children when they were growing up: no lying; no cheating; and no stealing. It should come as no surprise that none of them is working either on Wall Street or in the City of London.

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How to protect yourself when air quality drops

Install an air filter in your home.

Close your windows and turn on the AC.

Shower or bath after being outside.

Wear a face mask.

Stay indoors when conditions are particularly poor.

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