As reported in the BusinessWeek Online article, “The Skilling Trap” (June 12, 2020), Jeffrey Skilling, former CEO of Enron, said on the courthouse steps, after being convicted of white-collar crimes that will send him to jail, probably for the rest of his life,

	Gamblers' Ethics: Win Some, Lose Some

“Obviously I’m disappointed. But that’s the way the system works.”

The BusinessWeek article, went on to say:

… walking out of his trial into the prospect of decades of imprisonment, he stayed in character. He did not say that he was robbed of justice or express regret or defiance. He proved himself, considering the circumstances, a maestro of emotional detachment.

Jeff Skilling’s comments suggest a professional gambler who, having lost a fortune, shrugs and says,

“That’s the way the game is played. You win some, you lose some.”

It may be unfortunate and lamentable for society, but Jeff Skilling was simply telling the truth as he saw it, according to tenets of moral relativism learned at the Harvard Business School and his interpretation of corporate behavior observed while working as a consultant with McKinsey and Company.

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The SEC has sanctioned the use of risk-return predictive software as a sales aid by NASD registered representatives, as long as disclaimers are displayed.

(See PDF file)

Each forecasting tool must be accompanied by a description of the criteria and methodology used, including the tool’s assumptions and limitations.

However, the reverse side of regulation is enforcement and there will be a certain difficulty in dealing with the materiality or adequacy of disclosure of theories that are, in the final analysis, unscientific.

The 10b-5 Daily in “What is an Efficient Market?” discusses how the Efficient Market Hypothesis has already entered the courts.

(See also: The Non Efficient Market).

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The problem with finding a way to expense stock options lies in the reluctance of company executives and market intermediaries to acknowledge the true cost and to the meddling of theoretical economists in areas best left to practical accountants. This can be illustrated with a simple example.

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