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non-financial violations of positions of trust often are considered as nonsharable by trusted persons since they represent a threat to the status which holding the position en- tails. Most individuals in positions of financial trust, and most employers of such indi- viduals, consider that incumbency in such a position necessarily implies that, in addition to being honest, they should behave in certain ways and should refrain from participa- tion in some other kinds of behavior.”15 In other words, the mere fact that a person has a trusted position brings with it the implication that he or she can and does properly man- age money.

“When persons incur debts or in some other way become financially obligated as a re- sult of violation of the obligations ascribed to the role of trusted person, they frequently consider that these debts must be kept secret, and that meeting them becomes a non- sharable financial problem. In many instances, the insurance of such debts is also con- sidered incompatible with the duties and obligations of other roles which the person might be enacting, such as those of a husband or father, but the concern here is with such debts only as they represent conflict with the person’s role as a trusted person.”16 Cressey describes a situation we can all appreciate—not being able to pay one’s debts—and then having to admit it to one’s employer, family, or friends.

Problems Resulting from Personal Failure

Problems resulting from personal failures, Cressey writes, can be of several different types. “While some pressing financial problems may be considered as having resulted from ‘economic conditions’ . . . others are considered to have been created by the mis- guided or poorly planned activities of the individual trusted person. Because he fears a loss of status, the individual is afraid to admit to anyone who could alleviate the situa- tion the fact that he has a problem which is a consequence of his ‘own bad judgment’ or ‘own fault’ or ‘own stupidity.’ ”17 In short, pride goeth before the fall. If the potential of- fender has a choice between covering his poor investment choices through a violation of trust and admitting that he is an unsophisticated investor, it is easy to see how some prideful people’s judgment could be clouded.

Business Reversals

Business reversals were the third area Cressey detailed as a part of the nonsharable problem. He saw these as different from personal failures, since many businesspeople consider their financial reverses as coming from conditions beyond their control: infla- tion, high interest rates, raising capital, and borrowing money. Cressey quoted the re- marks of one businessman who borrowed money from a bank using fictitious collateral.

Case 36. “There are very few people who are able to walk away from a failing business. When the bridge is falling, almost everyone will run for a piece of timber. In business there is this eternal optimism that things will get better tomorrow. We get to working on the business, keeping it going, and we almost get mesmerized by it. . . . Most of us don’t know when to quit, when to say, ‘This one has me licked. Here’s one for the opposition.’ ”18


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