Ralph Cioffi of Bear Stearns must have been a pretty smart guy to have gotten as far as he has. He had the world by the tail. He had it all. A cozy position as a hedge fund manager, rich clients and investors, butt planted firmly on top of the Wall Street heap. He must have been smart. Who but a genius would write an email like this?
Believe it or not – I've been able to convince people to add more money.
after receiving an email from a company analyst that recommended closing its subprime mortgage hedge funds, stating:
If the [economists' report] is correct, the entire subprime market is toast. … If AAA bonds are systematically downgraded then there is simply no way for us to make money – ever. … caution would lead us to conclude the [economists' report] is right – and we're in bad bad shape.
Now he'll be able to put his genius to the test, outwitting federal prosecutors and securities plaintiffs' attorneys by explaining why he wrote that email days before Bear Stearns' fund, and the company itself, collapsed. Certainly his lawyers, who are probably almost as smart as Cioffi, will come up with creative explanations for what, to lay jurors, is going to look a lot like investor fraud. What a fascinating intellectual exercise! And what an expensive one.
But it needn't have been so challenging. An email stating:
I disagree with your conclusions because the Bear Stearns fund is sound, and should provide good long term returns for investors willing to wait out what based on my data and experience appears to be a temporary downturn…
would be easy to explain. Except that sober, judicious responses don't get sent by email. They get sent by letter, after eyes have seen them once, twice, or thrice, and considered what the words actually mean, and how they might be construed by others. Emails are typed and sent in an instant, and once sent can't be called back. Even if worse came to worst, you could break into a mailbox (warning: this is a serious crime). You can never recall anything from the tubes.
I'm a lawyer, and I know I'm stupid. I use email for professional purposes, but I try not to use it for important communications, because in the heat of the moment deliberation is lost. The internet makes idiots of us all. It does it to people smarter than I am. It does it to people smarter than you are.
Just say no to the internet. Or if you can't, at least wait five minutes, have a sip of coffee, maybe go the bathroom, and think a bit before clicking the "send" button.