The man at the mike tells the crowd that he's a financial planning executive ready to respond to allegations against his company with a prepared statement. Before he can say his name, the restless group assembled before him starts lobbing questions. How, they demand, did a financial planner with the firm persuade two elderly people to change their wills, defrauding them? Why, audience members shout, didn't the firm discover this before the state attorney general did?

The executive's eyes dart nervously. His mouth twists. The fuselage starts.

"Did your compliance department know?"- one audience member shouts. "Has the rep been suspended?" - another asks. "Has your firm specifically targeted people with dementia?''

"Is there no oversight? How is he out there stealing from 89-year-old people?"

The man at the mike laughs nervously, which only provokes the reporters. He tries to answer and suddenly blurts, "No further comment,'' and bolts off stage, trailed by shouts.

The press conference was actually a bit of theater, a simulation using coworkers from a boutique financial services firm in California taking part in an ethics class. It's one of the teaching tools used by the Center for Ethics in Financial Services at the American College in Bryn Mawr, Pa., a financial services training center. The center hopes such tactics will convince executives and employees how the specter of fraud might make one of them "the Bernie Madoff in your hometown,'' says Larry Barton, the college's president and CEO. "If your name and credit were on the line ... you can choose to be ahead of the story, or you can be passive and maybe see your practice destroyed.''

The moderator of the exercise, videotaped last year, is now the ethics center's new director. Julie Anne Ragatz is a bubbly, expectant mother and academic who has managed to combine Thomas Aquinas, business scandals and a little family destiny into a unexpected career that she and the college hope will introduce greater integrity in the financial world.



"I really believe that, if you do what's right and treat your client the way you would want to be treated ... you will be successful,'' Ragatz says. "It doesn't mean that you're going to make the sale, that you're going to be the top producer. It doesn't mean long term that you're going to be the most successful person out there. But it does mean that you're going to live with integrity.''

Ragatz comes to the job having never worked in the industry. The college chose her, Barton, says, because of her mastery of the subject and her ability to help securities, banking and insurance professionals understand - under the proverbial klieg lights - the implications of their actions.

"Ethics is one of the most complex, difficult subject to teach,'' Barton says. "In addition to being a good teacher, Julie wants to help every organization understand that [ethics] is not about compliance.'' The bottom line is: "Always put your clients' interest above your own.''

Ragatz was promoted in June, from associate director. The college recruited her as a pre-doctoral fellow in 2006, after a college staff member heard her give an academic presentation on "stakeholder theory and the moral imagination.''

"Which really has nothing to do with financial services," she helpfully points out with an easy laugh. At the time, Ragatz was an academic geek in the midst of amassing a quiver full of degrees. She earned a bachelor's from University of St. Thomas in Minnesota, read Latin and Greek, and was working toward a doctorate in philosophy at Marquette University in Milwaukee, focusing on Thomas Aquinas, the Roman Catholic theologian who wrote about, among a vast array of heady topics, the moral habits of men.

Ragatz wasn't sure where her philosophy habit would take her, or what she would wind up doing. "I wanted to put off work in my 20s and I succeeded admirably,'' says Ragatz, who's 35.

The college saw a smart, young woman who had a lot of energy and was comfortable talking about a complex subject in front of a crowd. So she moved to Pennsylvania, then-boyfriend (now husband) in tow, enrolled in the philosophy department at Temple University in Philadelphia, and went to work. In her office, she read tomes about the financial services industry. She'd buttonhole executives about the business.

"Since I never had a job, or sales experience, except being a grad student, I said, 'Tell me what it's like.' And I found people really wanted to talk,'' she says. "In five years, I knew more about what it's like to be a practitioner, what it's like to manage people in this business, what it means to recruit people, better than almost anybody.''

She had another advantage, college officials say: She grew up in the business. Her father, Stephen Ragatz, is a career financial advisor, currently an independent registered representative of Financial Network Investment Corp. who provides planning through AdvisorNet Financial in Maplewood, Minn.

"She certainly did not have an interest in anything financial growing up,'' Stephen Ragatz says. She was, however, driven by values. During the 1990s Bosnian war, Ragatz, then an undergraduate, wrote a paper about the just-war theory and was asked to speak before a military audience in Washington about the choice between protecting soldiers versus firing on civilians. In time, she became interested in business scandals and regulation, her father says. Over Saturday breakfasts, the two would hash out the problems that had engulfed Enron and WorldCom. "It fascinated her that people get away with this,'' her father says. "I think it was the onslaught - how business is really run and truly how dramatically it can hurt people.''

At Temple, she focuses on ethical theory and moral perception, the ability to perceive the morally correct choice. In her academic work, she asks questions that might easily be posed in a boardroom: How do we decide the right thing to do? Why do people do things that are not in their best interests? Why are some blind to the wrong around them?

Lewis Gordon, the Laura H. Carnell Professor of Philosophy at Temple, has been working with Ragatz on her initial dissertation research. She's looking at the integration of ethics and philosophy of economics, and the relationship between the distribution of values in a society. "There's a lot of rationalization over business practices that are often very unethical," he says. "One of the things she's concerned about is the problem of normalization of unethical practices.''



Sigmund Freud, he adds, observed that society, although it praises issues of justice, created conditions that allow people to behave unethically. "If you look at Wall Street, there were windows for people to behave ethically, but in those circumstances those people would have been considered stupid. It happens not only in financial markets. These are issues in medicine, in the legal profession. There is a profound crisis in professional life. ... For her, business ethics is not an intellectual exercise. For her, it's a fundamental question.''

Ragatz's two worlds collide in the bookcases inside her office at American College. Along with books on Aquinas, Aristotle, Locke and Hegel sit the best of Drucker and investigations of Prudential Bache and the 2008 financial crisis.

Ragatz is a voracious reader and diagnostician of corporate malfeasance, using the examples for the M.B.A. classes she teaches at Villanova University, also in Pennsylvania. "Ripped from the headlines," she says. "I'm like Law & Order. ''

She presents the cases and then starts pushing: What are the ethical foibles that led to this situation? What's the cultural climate of the firm? What are the social-political regulatory effects?

She has a diagnosis for all the business biggies. Lloyd Blankfein, CEO of Goldman Sachs? "The tragedy of a person who lacks moral perception,'' she says. Dick Fuld, the last CEO of Lehman Brothers? An example of overconfidence.

"Ethics is about more than people wanting to be good people,'' she explains. "Ethical decision-making is a skill, not a hope. We can't train people to make ethical decisions. What I can do is teach skills to make sure that people's decisions reflect their own deeply personal values.''

With the executives at American College, she tries to create an environment in which professionals can discuss what bothers them about their industry or their workplace, for that matter. "People don't think about ethics at all,'' Ragatz says. "I think it just floats in the background. This is a tough economy and a tough business. And as with all sales- people, production matters. You don't get a lot of space to think. I give people space to think.''

To do this, she gets people attending her sessions to think hard about the legacy they'll leave, as well as their reputation, using, in some cases, the press conference simulation. "She gets back to the issue: 'How will your kids remember you and your career' and 'How will you defend what just transpired?'" her boss, Barton, says. "That's an enormously important facet. I remember people in the room kind of wiggling in their chairs. We don't like to talk about that stuff at work.''

One of the best ways to act morally is to put yourself in a moral climate, Ragatz says. That means realizing that once you decide to work for an organization, changing that organization's culture is going to be nearly impossible. "People have an amazing ability to think they can stand alone,'' she says.'


Suzanne Sataline, a former health care reporter at The Wall Street Journal, is a freelance writer in Brooklyn, N.Y.

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