Penn’s Pipeline to White Collar Crime

by Anonymous

After graduation, Penn alums enter the professional world filled with opportunities. However, the most popular career path is finance, with 25% entering the field. “Technology” and “consulting” are second and third respectively, at 17% and 15%. The allure of these career paths captures the attention of students looking for a career structured around financial stability, opportunity, and entrepreneurial ambition. However, a culture of wealth-chasing, unfettered competition, and selfishness within many of these high paying fields breeds the practice of white collar crime. This form of crime is directly connected to the perpetrator’s prestigious education and social status. Examples include wage theft, bribery, and fraud. While defined as non-violent, white-collar crimes spur a ripple effect, leaving the working class most harmed by a pursuit based in greed. 

While highlighting the accomplishments of its most notable entrepreneurs at every chance, the University seemingly overlooks the white collar crimes of graduates using their Penn education for selfish gain. One of the most notable examples occurred in 2012, when Rajiv Goel (Wharton MBA ‘83) was found guilty of insider trading after assisting former classmate Raj Rajaratnam (Wharton MBA ‘83) with information on investment plans and intel earnings. During his tenure as a Wharton MBA student, Ashik Desai oversaw sales and analytics at Outcome Health, a role leading him to be charged in a $1 billion fraud scheme after discovering that the company overbilled advertisers by about 25%. 

At the height of his career, Michael Milken (Wharton MBA ‘79) served as senior executive at Drexel Burnham Lambert where he developed the High-Yield Bond Market, a position in which he received a $550 million salary in 1987 and the nickname “the Junk Bond King”. However, he used his position to fraud investors out of 100s of millions of dollars, leading to his 1989 federal indictment on 98 counts of fraud, racketeering, insider trading, manipulation of stock prices. A year later, Milken pleaded guilty to six felonies and received a 10-year prison sentence, fined $600 million (his website claims it was only $200 million), and barred from participating in the securities industry. Milken only served 22 months in prison after securing an early release by testifying against his former colleagues at Drexel. 

In 2020, Penn alumnus Donald Trump (Wharton ‘68) pardoned Milken. Trump, whose presidency was marked with accusations of tax evasion, cited his commitment to cancer research as reason to pardon. Today, Milken’s estimated net worth is $6.5 billion and is idolized by much of the investment banking world for his illicit techniques to aggregate wealth. 

The devastating effects of white-collar crime go beyond a jail sentence or fine. Although white-collar crimes make up 3% of federally prosecuted crimes yearly, 25% of US households will become victims of white collar crimes at least once. When assessing company losses, it is 16 times likelier that drops will come from executives rather than employees. Short-cuts and fraudulent tactics can also affect employees by leading to unsafe working conditions and environmental problems in local communities caused by pollution. Yet, even considering the damage 90% will go unreported to authorities. For the many working class individuals who do not have savings to fall back upon, these crimes can lead to financial devastation. 

When faced with the reality of white collar crime committed within Penn’s alumni network, we should wonder whether a curriculum in business ethics is sufficient at the university. With only a pop of the Penn bubble, one can observe the greater societal harm caused by these crimes of greed. Penn students, then, must assess what price matters most when entering the corporate sector.