At times, the law seems disconnected from common sense or the real world. While it is debatable whether “business ethics” is an oxymoron in the rough and tumble atmosphere of Wall Street, there are some fixed moral guide posts for ethical business conduct. Does some conduct disqualify a student from receiving a business degree? Should a university confer a master of business degree to someone guilty of criminal conduct? How much chutzpah does it take to argue that a university could not use a guilty plea to criminal charges to deny a student his MBA degree?
In Rosenthal v. NYU, an accountant conspired with his brother to trade securities based on non public information, a violation of the U.S. securities laws. It seems that this scheme was hatched while plaintiff was a graduate student at the Stern School of Business at NYU, pursuing a Master of Business degree. Ironically, plaintiff taught an ethics course as a teaching assistant, presumably guiding other young minds in discerning the fine line between ethical and unethical conduct. After his graduate course work was completed, plaintiff entered a guilty plea to conspiracy to commit securities fraud. NYU learned of the plea, undertook an investigation and eventually denied plaintiff his degree based on his admittedly criminal conduct.
Plaintiff protested and filed a federal court action. In a detailed opinion, the court upheld the denial of plaintiff’s degree and sided with the university. Perhaps the plaintiff should have paid closer attention to the material he taught in his professional responsibility course?
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