Federal Reserve chief Alan Greenspan delivered this spring's commencement address to graduates of the University of Pennsylvania's Wharton School in Philadelphia. In stressing the need to preserve the Sarbanes-Oxley Act, Greenspan reminded the audience that corporate greed is not new, and he referenced three notorious scoundrels who were the forerunners to the likes of Bernard Ebbers, Hank Greenberg, and Jack Grubman. "To be sure," said Greenspan, "the history of world business, then and now, is strewn with Fisks, Goulds, Ponzis and numerous others treading on, or over, the edge of legality." So who were these three early believers that, in business, anything goes?

James Fisk was a one-time cotton smuggler and circus worker. Jay Gould worked as a store clerk and a surveyor's assistant before becoming a railroad speculator. Together, the two men tried to corner the gold market in 1869 and were responsible for the original "Black Friday." Fisk and Gould bought huge amounts of gold and gold futures, driving up the commodity's price, and they enlisted President Grant's brother-in-law to convince him not to interfere with the scheme. On Friday, September 24, 1869, after realizing the men had duped him, Grant ordered the sale of $4 million of government gold, causing gold prices to fall sharply. The crash ruined thousands of investors.

Carlo "Charles" Ponzi was an Italian immigrant living in Boston in 1920. He promised investors that he could double their money in ninety days by purchasing U.S. postal coupons in Italy for a fraction of face value, and then selling them for full value in America. He rewarded early investors with "returns" that were actually the cash of later investors, and the ploy convinced even more people to give him their money. Forty thousand people invested over $15 million in his scheme before it collapsed.

Greenspan told the Class of 2005, "Our system works fundamentally on trust and individual fair dealing." But like Fisk, Gould, and Ponzi, too many of today's business leaders lack those values. Without mentioning names, Greenspan said, "We need only look around today's world to realize how valuable these traits are and the consequences of their absence."

"Material success," said Greenspan, "is possible in this world, and far more satisfying, when it comes without exploiting others. The true measure of a career is to be able to be content, even proud, that you succeeded through your own endeavors without leaving a trail of casualties in your wake." Amen to that. Bookmark this post on del.icio.us