The Haas Fintech Club is gearing up to host its first conference this Saturday, reaching out through the event to educate students, provide networking opportunities, and attract more diverse voices to the industry.
The conference, called Breaking into Fintech, will be held Dec. 3, from 10 a.m. to 3 p.m. at Chou Hall’s Spieker Forum.
The event includes speakers from Stripe, Chime, JPMorgan Chase, and Citi Impact Fund. Peggy Mangot, managing director of fintech partnerships and commercial banking at JPMorgan Chase, is the keynote speaker.
The Fintech Club, founded in 2016, now has more than 250 members, including 182 students in the full-time and evening & weekend classes. Each year, the club hosts the popular Fintech Speaker Series, treks to fintech companies, industry primers, and networking events. But this is the first year they decided to host a full conference to explore fintech’s range—from mobile banking and automated portfolio managers to peer-to-peer payment services such as PayPal and Venmo to cryptocurrency and blockchain technology.
Jennifer Tran, MBA 23
“Fintech has such a wide spectrum, which is why we want to break it down,” said Jennifer Tran, MBA 23, vice president of the club. “MBA students are always looking for what’s next, and fintech has had a huge buzz in the last five to 10 years, in particular.” Tran, who interned last summer at Apple in worldwide product marketing, said fintech holds incredible possibilities for financial inclusion and empowerment.
“As a child of refugees to the U.S., I saw firsthand how my family struggled to navigate the financial system and how that impacted their livelihoods and opportunities,” she said. “I want to make this space more accessible and responsive to the needs of those who have been historically excluded from it.”
Petra Nelson MBA 23, vice-president of the Fintech Club, said that while the industry dates back to the invention of the credit card in the 1950s, the Great Recession of 2007 helped push fintech into new territory. Nelson, who interned at PayPal in partnerships and development, said fintech is making the movement of money cheaper and faster for consumers and businesses alike.
Petra Nelson, MBA 23
“Before Haas, I worked in nonprofit fundraising and microlending, and saw how difficult it can be for some to gain access to affordable financial services and build intergenerational wealth. I’d like to be a part of changing that.”
“After the financial crisis is when we saw that there were problems with the way that our financial system was working,” Nelson said. “A lot of startups were born in that era, trying to fill in gaps and figure out how they could innovate upon the sector.”
Conference panelists will discuss payment infrastructure, as well as the crucial role of fintech startups, founders, and investors in the industry.
“We’re seeing a lot more players in spaces that hadn’t existed before,” Tran said.
There have been calls inside and outside the fintech industry to diversify leadership. Conference organizers are hoping to reach more underrepresented students and women, and provide plenty of opportunities for networking with Haas alumni and industry leaders.
KathrynHall is the Founder and Co-Chair of one of the largest woman-led investment companies in the world, Hall Capital Partners. In 2021, Hall launched Galvanize Climate Solutions, a climate tech investment platform that will back companies from the seed-stage through private equity and project finance. The new fund will invest in companies and organizations around the world working to curb carbon emissions.
In a fireside chat, Hall discussed her experience as a female leader, the role of the private sector financial institutions in climate solutions, and advice for students who are interested in impact investing.
This is a Sustainable Futures event. Developing a sustainable, climate-resilient economy covers every aspect of business—agriculture, real estate, energy, finance, and corporations. All these aspects of business will need to be reimagined and redesigned to address the current environmental, social and economic crises. This event is co-sponsored by the Sustainable and Impact Finance Initiative.
John G. Myers, right, teaching an executive education class (Haas file photo)
Professor Emeritus John G. Myers, a faculty leader whose warm personality, scholarship and mentoring, and expertise in the science of consumer behavior made him invaluable at the Haas School of Business for decades, passed away on October 14, 2022, in Oakland, Calif. He was 89.
John G. Myers (Haas file photo)
Myers, who first arrived in Berkeley and joined the business school in 1964, was one of the early trained behavioral scientists in marketing studies. His fascination with the factors that affect people’s choices—and how to use evolving technologies to define, measure, and analyze those factors—drove his many scholarly pursuits and advisory activities, and ultimately his leadership at Haas.
Myers personified the concept of belonging in the Haas School community and UC Berkeley, said former Haas Dean Rich Lyons, professor and chief innovation and entrepreneurship officer for UC Berkeley.
“John understood belonging so deeply and what it meant to belong to this place, to have an identity that was fundamentally connected to this place,” Lyons said.
Canadian heritage
John G. Myers on a visit back to his hometown of Penny, British Columbia (Photo courtesy of the Myers family)
Myers was born on July 22, 1933, in Vancouver, British Columbia, and began his education in a one-room schoolhouse in the town of Penny, where his father owned a lumber mill. At a young age, he went to boarding school in Victoria. Despite being two years younger than his classmates and the smallest boy on the teams, he was a versatile athlete who played rugby, cricket, and soccer. He graduated with a bachelor’s in forestry and commerce from the University of British Columbia, where he was involved in campus journalism and athletics. He went on to earn an MBA in 1958 from the University of Western Ontario, where he discovered his love of teaching. In 1966, he received his PhD in business administration and marketing as well as a master’s in sociology from Northwestern University.
Myers was unreserved in his dedication both to Haas students and administration. In the 1980s, he served as associate dean of academic affairs, associate dean of curriculum, and associate dean of the graduate school. He chaired the Marketing and International Business Group from 1974 to 1977 and was director of the PhD Program from 1982 to 1985. He also served as a member of the ASUC Store Operations Board.
His Haas colleagues remember him as a calming force. Despite his imposing frame and intellect, Myers put people at ease with his easygoing personality and sense of humor. “He was just like a big teddy bear. He was warm and safe and friendly. He got along with everybody,” said David Aaker, the E.T. Grether Professor Emeritus of Marketing and Public Policy.
Through his love of evolving technologies, Myers worked to establish the first Haas computer lab in the basement of Barrows Hall and designed and developed the school’s mainframe and PC-based computer information system.
Research on consumer behavior
Among Myers’ areas of research were promotional incentives, e-commerce consumer behavior, and consumer indecision, as well as the management of brands and trademarks in Russia. In an article published in the Journal of Consumer Research in March 1998, Myers and Michal Strahilevitz, PhD 93, examined how a company’s promise to donate to charity could drive consumers to purchase certain products.
A 1974 Haas newsletter featuring a profile of John G. Myers
Myers co-authored with Aaker, and later Rajeev Batra, “Advertising Management,” an influential textbook widely-used in graduate business schools internationally and now in its fifth edition. He also taught advertising management in Russia and France and served as vice president of the Education Division of the American Marketing Association and president of the Association of Directors of Doctoral Programs in Business.
Myers served as a consultant to a wide variety of public and private organizations on marketing and advertising issues, and as expert witness on numerous public policy cases. He was proud of his work on the board for the National Junior Tennis League of San Francisco and Oakland for under-resourced youth.
Dedicated mentor and community builder
Myers was passionate about creating a sense of community at Haas, hosting parties for PhD students and serving on numerous student thesis committees. His devotion to Haas marketing students continued after his retirement in 1994 with the report “Four Decades of Berkeley Marketing PhDs.”
Kay Lemon, PhD 94, recalled how welcoming Myers and his wife were in the early 1990s when Lemon and her husband first arrived at UC Berkeley. Her first teaching experience was as Myers’ graduate student instructor.
“John was a great mentor to me. He provided strong support, insights and encouragement throughout my career,” said Lemon, who now holds the Accenture Professorship at the Boston College School of Management “He was one of the kindest and most generous individuals I’ve known.”
In 2010, Myers spoke about his teaching career in an interview with St. Michaels University School in Canada, which he graduated from in 1947. “One of my teaching styles was to constantly challenge students to think. This was not very popular with some students. It was easier to spend time in lecture dreaming about other things or just automatically taking notes without much thinking,” he said.
While his classroom could prove rigorous, Myers had kind words for struggling students. “If any doctoral student was discouraged about their coursework, or dissertation, they knew John would be encouraging,” said Strahilevitz, now a professor of marketing at Saint Mary’s College of California.
While hitchhiking in Sweden, John Myers advertised his Canadian heritage on the chance it would improve his chance of a ride. He carried the same briefcase throughout his career. (Photo courtesy of the Myers family)
Always the consummate host, Myers and Arlyn, his wife of close to 60 years and a UC Berkeley College of Chemistry emeritus lecturer who also earned her PhD from Northwestern, hosted generations of Haas students, faculty, and their families. They started traditions of hosting PhD students in the early 1980s and Haas emeriti faculty in the late 1990s. Their house, with its view of the Bay, was “the go-to place,” said Prof. J. Miguel Villas-Boas, the J. Gary Shansby Professor of Marketing Strategy.
The late Haas Dean Raymond Miles, in comments prepared for Myers’ retirement, highlighted Myers’ love of bringing happiness to others by playing Santa at Haas holiday parties.
Myers’ son Shawn D. Myers earned his MBA at Haas in 1999. “My father was an immeasurable influence on all those who were lucky enough to spend time with him. As a father and grandfather, he was quick with a joke, able to captivate with a story, and always there to support us through difficult times. He helped to shape so many people in his personal and professional lives, and we will endeavor to carry his spirit of generosity and joy with us forever.”
Myers is survived by his wife, Arlyn; their children Karlyne M. Reilly (husband Jay G. Reilly) of Potomac, MD, Shawn D. Myers (wife Jennifer B. Myers) of Redwood City, Calif., and Amanda J. Myers of Coconut Grove, FL; and grandchildren Jordan A. Reilly, Megan B. Reilly, John (Jack) R. Myers, and Katherine C. Myers.
John and Arlyn Myers Marketing Award
The family suggests that those wishing to honor Myers may do so by donating to the John and Arlyn Myers Marketing Award at the Haas School of Business established by the family in his honor: https://haas.berkeley.edu/giving/. To make a gift online, please note “In Memory of Professor John Myers” on the donation form (choose any fund). Donations may be made by check to “UC Berkeley,” with a note “Myers Fund/Haas,” and mailed to UC Berkeley Gift Services, 1995 University Ave, Suite 400, Berkeley, CA 94704-1070.
Growing up as a shy introvert, Reddit COO Jen Wong said she never saw herself as a leader.
“I think I assumed a leader was a person who told other people what to do,” Wong said.
It was her fascination with companies and the people who lead them, as well as a drive to solve new problems, that led her to pursue a career that has included leadership positions at Time, Inc.; PopSugar; AOL, and now Reddit.
“I’m a puzzler at heart, and when my mind starts searching for a new problem to solve, and there’s something I can learn, that propels me forward,” Wong said. “I always want to move into something that has a clear lane for me to have an impact.”
Wong, who topped Reddit’s Queer 50 list this year, shared her leadership journey with MBA students and the Haas community at a Dean’s Speaker Series talk on Sept. 21. The talk was co-sponsored by Q@Haas as part of Coming Out Week, September 18-22.
As Reddit’s Chief Operation Officer, Wong oversees business strategy and related teams. Only four years into her tenure as COO, she has helped lead the growth of Reddit into a profitable business by scaling ad revenue to well over $100 million. Her leadership goes beyond growing the business; she is also passionate about Reddit’s company goal that’s just as important as revenue: diversity and inclusion. In addition, Jen is viewed as an expert in the digital landscape.
A destroyed car in the courtyard of the economics department at V. N. Karazin Kharkiv National University in central Kharkiv on Aug. 8, 2022. The Ukrainian city, 50 kilometers from the Russian border, has endured attacks since the beginning of the full-scale Russian invasion on February 24. (Photo by Richard Wright / SOPA Images/Sipa USA)(Sipa via AP Images)
A new academic fellowship program funded by UC Berkeley’s Haas School of Business and the Department of Economics will help Ukrainian scholars persevere with their work through the hardships of the war.
Scholars located in Ukraine and affiliated with a university, college, or research institute can apply for $5,000 grants to continue with their research and teaching. The $140,000 fund, granted equally by Berkeley Haas and Berkeley Economics, will help sustain up to 28 Ukrainian academics.
“This is going to be a tough year for many Ukrainian scholars in terms of security, housing, and budgets. Many have lost their homes, offices, labs, and classrooms,” said Yuriy Gorodnichenko, the Quantedge Presidential Professor of Economics and a member of the fellowship committee. “This fellowship not only gives people the means to survive and to have some time to do research, but also serves as an important sign of solidarity against Russian aggression.”
“The barbarism of Russia’s war aims to destroy Ukraine’s people, institutions, and civil society,” added Anastassia Fedyk, an assistant professor of finance at Berkeley Haas, who is also on the fund committee. “Bolstering Ukraine’s education system at this critical time will help increase Ukraine’s resilience.”
“The barbarism of Russia’s war aims to destroy Ukraine’s people, institutions, and civil society. Bolstering Ukraine’s education system at this critical time will help increase Ukraine’s resilience.” —Assistant Professor Anastassia Fedyk
Since Russia’s invasion of the country last February, Fedyk, Gorodnichenko, and other economists with close ties to the region have been using their expertise support Ukraine—giving media interviews, writing op-eds, raising funds, and joining with others in the U.S. and globally to form the group Economists for Ukraine. The group has now partnered with Universities for Ukraine, raising funds from several universities for fellowships and providing a central clearinghouse for nonresidential fellowship programs.
“We are very pleased to join with Berkeley Economics to support this effort to preserve academic scholarship in Ukraine during this extremely difficult period,” said Berkeley Haas Dean Ann Harrison.
Many Ukrainian academics are unable or unwilling to leave the country—including all men between 18 and 60, who are prohibited from leaving. Yet many find themselves displaced and underfunded, without the means to continue with their work. The fellowship program aims to bridge some of the gap to keep scholarship moving forward and to minimize brain drain, preserving some capacity to rebuild the country, Gorodnichenko said.
In addition to Gorodnichenko and Fedyk, the UC Berkeley Ukrainian fellowship committee includes Berkeley Haas Associate Professor Dmitry Livdan and Berkeley Economics Assistant Professor Vira Semenova.
Dean Ann Harrison kicked off the first Dean’s Speaker Series talk of the year with a fireside chat with Pierre Breber, Vice President and CFO of Chevron. The talk, co-sponsored by the student-led Berkeley Energy and Resources Collaborative and the Energy Institute at Haas, was also the first in the Sustainable Futures Series, which will welcome business leaders this fall to talk about the role of business in combating climate change.
“We believe that developing a sustainable, climate-resilient economy goes into every aspect of business—whether it’s agriculture, real estate, energy, finance, anything and everything will need to be reimagined and redesigned to address the current environmental, social, and economic crises,” said Harrison. “We really believe here at Haas that addressing our climate crisis and transitioning to a carbon free energy source is an integral component of the world’s sustainable future.”
Breber, a “double Bear” who earned bachelor’s and master’s degrees from UC Berkeley in 1986 and 1987 along with an MBA from Cornell in 1989, discussed the changes he’s seen over more than 30 years in the energy industry. He talked about Chevron’s ESG strategy, its goal of lowering carbon emissions in its traditional oil and gas business, as well as its investments in renewable fuels, hydrogen, and carbon capture and storage.
“Our primary objective is to safely deliver higher returns and lower carbon,” he said. “It’s clear and simple, and it’s something that our employees have rallied around.”
Breber faced pointed questions from Harrison and students on how an oil and gas company can be part of a sustainable future. He said the company plans to continue its traditional oil and gas business—which holds 2% of the market—with a lower carbon output, while also building its faster-growing new energy business.
“Right now, demand for our products is growing, not shrinking,” Breber said, pointing out that if supplies are cut while demand is still there, heating homes and driving to work will be unaffordable. “It’s an energy transition, it’s not a light switch… We’re going to be a really strong, responsible traditional energy provider, and we intend to be a leading a new energy provider.”
Harrison thanked Breber for volunteering his time to speak at an especially dynamic Dean’s Speaker Series.
“Students, we look forward to a sustainable future. We need to think big,” she told the audience. “Working on the biggest challenges, with the biggest companies, creating the biggest transformations. We need your courage to engage in this kind of transformational change that will save our planet.”
This month Haas welcomed 76 new Berkeley Executive MBA students—a highly-accomplished cohort that includes a pediatric cardiologist, a Green Beret, and an Emmy-award winning animator.
The EMBA Class of 2024 gathered on campus July 15-17 for an orientation that included workshops focused on academics and career management, a “life hacks” panel session with continuing EMBA students, a scavenger hunt, and a happy hour with alumni.
“We are thrilled that you have selected Haas,” said Jamie Breen, assistant dean of MBA Programs, in her welcome address to students. “The people in this room are going to be your life-long friends. You are going to share personal ups and downs, professional ups and downs. You will hire each other. You will invest in each other. And all together, this will become an incredibly important part of your life.”
A scene from Berkeley Executive MBA orientation
The class represents a diverse range of backgrounds, industries, job functions, and countries of origin. The new students have an average of 14 years of work experience in industries ranging from tech to retail to consulting. All together, they work at 74 different companies, including IBM, Google, Amazon, Chevron, Salesforce, Intel, Walmart, and Ford.
Forty-six percent live outside of the Bay Area, hailing from around the country and world—including Nevada, Arkansas, Utah, New Mexico, Georgia, Hawaii, and Ukraine. And more than 60% were born outside of the U.S., including Bangladesh, Ghana, Germany, Italy, Japan, Brazil, and the United Kingdom.
More than half of the new students hold at least one advanced degree, including eight PhDs, three MDs, and one JD. Their average age is 38, and women make up 41% of the class—a record for the EMBA program.
Students said they’ve returned to Haas for an MBA for many reasons: to change their career path, gain new skills, or move up in their existing jobs.
Los Angeles native Richard Golfin III, head of legal and chief compliance officer at Alameda Alliance for Health, said he had been deciding between Yale and Haas, but ultimately chose Haas for its rigor and its Defining Leadership Principles: Question the Status Quo, Confidence Without Attitude, Students Always, and Beyond Yourself.
Golfin, who’s also a board member of local nonprofit The Bread Project, said he’s always looking for ways to grow. “As a young executive, I want to continue to improve and build myself as a leader and getting an MBA will do just that,” he said.
Nina D’Amato, an associate chief information officer for Santa Clara County, said she was also drawn to the school’s distinctive culture and the people it attracts. “It’s all about finding the right fit,” D’Amato said. “I came to Haas because I wanted to surround myself with highly-intelligent and talented people who believe in and reflect those principles every day, just as I do.”
Rob Bajohr, a tech marketing executive, said getting an MBA would give him the quant and leadership skills that he needs to lead in the tech and automotive industries.
“I went to school for design and that has been good in many ways,” Bajohr said. “But I didn’t learn about financial accounting or macroeconomics. The Haas MBA will increase my credibility and bridge the gap between my marketing background and my aspirations.”
From top row, left to right: New Berkeley Haas assistant professors Tanya Paul, Ali Kakhbod, Carolyn Stein; Sa-Kiera Hudson, Ambar La Forgia, Sytkse Wijnsma, Sarah Moshary, Matthew Backus, and Valerie Zhang.
Nine new assistant professors have joined the Haas School of Business faculty this year, with cutting-edge research interests that range from illicit supply chains to unequal social hierarchies; from financial crises to the incentives that shape innovation; and from health care management to decentralized finance to marketing and the demand for firearms.
The nine tenure-track hires are the result of a concerted effort by Dean Ann E. Harrison and other Haas leaders to expand and diversify the faculty.
“We are thrilled to welcome this wonderful, diverse new group of academic superstars to Berkeley Haas,” says Dean Ann E. Harrison. “We clearly are bringing the best to Haas, increasing the depth and breadth of our world-renowned faculty, and reinforcing our place among the world’s best business schools.”
The new faculty members have hometowns throughout the U.S. and around the world, including Texas, New York, Massachusetts, and Illinois; Iran, the Dominican Republic, China, and the Netherlands. Seven of them are women; one is Black, and one is Latinx.
“This is our most diverse cohort of new faculty ever, each one a rock star in their own right,” says Jennifer Chatman, Associate Dean for Academic Affairs and the Paul J. Cortese Distinguished Professor of Management. “We are very proud that we were able to lure them to Berkeley Haas.”
The new faculty members start on July 1, with most beginning to teach in spring 2023. They bring the total size of the ladder faculty to 88, up from 78 in 2020-2021.
Meet the faculty
Matthew Backus
Assistant Professor Matthew Backus, Economic Analysis & Policy
(he/him)
Hometown: Chicago, Ill.
Education:
PhD, Economics, University of Michigan, Ann Arbor
MA, Economics, University of Toronto
BA, Economics and Philosophy, American University
Research focus: Industrial organization
Introduction: I’m an economist with broad interests. Most recently, I’m interested in how we can use the tools developed by the industrial organization community to understand inequality and the distributional effects of policy.
Teaching: Microeconomics and Antitrust Economics (MBA)
Most excited about: After spending a year visiting, I’m most excited about the economics community at Berkeley.
Fun fact: I have a border collie, who is in training as a herding dog.
Sa-Kiera Hudson
Assistant Professor Sa-kiera (Kiera) Tiarra Jolynn Hudson, Management of Organizations
(she/her)
Hometown: Albany, NY
Education:
PhD/MA, Social Psychology, Harvard University
BA, Psychology and Biology, Williams College
Research focus: I study the psychological processes involved in the formation, maintenance, and intersections of unequal social hierarchies, with a focus on empathic/spiteful emotions, stereotypes, and legitimizing myths.
Introduction: I am a social psychologist by training, focusing on the nature of intergroup relations as dominance and power hierarchies. I have studied several psychological processes, including the role of legitimizing myths in justifying unequal societal conditions, the role of group stereotypes in the experience and perception of prejudice, and the role of empathic and spiteful emotions in supporting intergroup harm. My work is multidisciplinary, incorporating quantitative as well as qualitative methods from various disciplines such as political science, sociology, and public policy.
I am a fierce advocate for building community, providing mentorship, and supporting authentic inclusion for everyone. I believe it is a moral imperative to be present as a vocal, queer-identified Black women in academe, given the lack of representation, and I’m excited to see how I can contribute to diversity, equity, and inclusion efforts at Haas.
Teaching: Core Diversity, Equity, and Inclusion (MBA)
Most excited about: I identify UC Berkeley as my intellectual birthplace. It was during a summer internship program through the psychology department in 2010 where I first became interested in studying power structures and intergroup relations simultaneously. My overall research interests haven’t changed since that fateful summer. Being a faculty member here is truly a dream come true!
Fun fact: I love organizing and planning, so much so I taught myself how to use Adobe InDesign to create my own planner. I am also an avid foodie and cannot wait to check out the Bay’s food and wine scenes.
Ali Kakhbod
Assistant Professor Ali Kakhbod, Finance
(he/him)
Hometown: Isfahan, Iran
Education:
PhD, Economics, MIT
PhD, Electrical Engineering & Computer Science (EECS), University of Michigan
Research focus: Information frictions; liquidity; market microstructure; big data; and contracts
Introduction: I am a financial economist with research interests in financial intermediation, liquidity, contracts, big (alternative) data, banking and financial crises. A common theme of my research agenda is to study various informational settings and their financial and economic implications. For example: When does securitization lead to a financial crisis? Why is there heterogeneity in the means of providing advice in corporate governance? How does information disclosure in OTC (over-the-count) markets affect market efficiency? My research has both theory and empirical components with policy implications.
Teaching: Deep Learning in Finance (MFE)
Most excited about: Berkeley Haas is the heart of what’s next with world-class faculty working on exciting and innovative research. Given that my interdisciplinary research interests span finance, economics and big data issues, I could not ask for a better fit.
Fun fact: In my free time, I like to ski, sail, hike, and enjoy the outdoors.
Ambar La Forgia
Assistant Professor Ambar La Forgia, Management of Organizations
(she/her)
Hometown: I was born in Santo Domingo, Dominican Republic, but I grew up in Washington, DC and São Paulo, Brazil.
Education:
PhD, Applied Economics and Managerial Science, The Wharton School, University of Pennsylvania
BA, Economics and Mathematics, Swarthmore College
Research focus: Health care management; mergers and acquisitions; firm performance
Introduction: My research studies the relationship between organizational and managerial strategies and performance outcomes in the health care sector. In particular, I use quantitative methods to study how the strategic decisions of corporations to merge, acquire, or partner with other organizations can change managerial processes in ways that impact both financial and clinical performance. A secondary research strand studies how health care organizations adapt their service delivery and prices following changes in state and federal legislation.
Before joining UC Berkeley, I was an assistant professor of health policy and management at Columbia University’s Mailman School of Public Health. I am excited to continue to explore issues of healthcare quality, equity, and cost, while digging deeper into the management practices and organizational structures that could influence these outcomes.
Teaching: Leading People (EWMBA)
Most excited about: It is an honor to join the world-class faculty at Haas, and I am so excited to learn from and collaborate with my MORs colleagues on both the macro and micro side. Since my research is interdisciplinary, I also look forward to connecting with scholars in the School of Public Health.
As a self-proclaimed “city girl,” I am excited to get out of my comfort zone and explore the natural beauty of Northern California.
Fun fact: My hobbies include yoga, urban gardening, adopting animals and stand-up comedy.
Sarah Moshary
Assistant Professor Sarah Moshary, Marketing
(she/her)
Hometown: New York City, NY
Education:
Phd, Economics, MIT
AB, Economics, Harvard College
Research focus: Marketing and industrial organization
Introduction: My research interests span quantitative marketing, industrial organization, and political economy. I am currently working on projects related to paid search advertising, the pink tax (price gap in products targeted to women), and the demand for firearms. Before joining Haas, I worked at the University of Chicago Booth School of Business and at the University of Pennsylvania.
Teaching: Pricing (MBA)
Most excited about: I am excited to get to know my future colleagues!
Fun fact: My two hobbies are running and pottery—though I am more enthusiastic than talented at either :).
Tanya Paul
Assistant Professor Tanya Paul, Accounting
(she/her)
Hometown: Murphy, Texas
Education:
PhD, Accounting, The Wharton School, University of Pennsylvania
BS, Economics, Statistics and Finance, The Wharton School, University of Pennsylvania
Research focus: Standard-setting and financial reporting; the determinants and consequences of voluntary disclosures
Introduction: After getting my PhD, I spent a year at the Financial Accounting Standards Board learning about contemporary accounting issues and understanding the types of questions that standard setters are grappling with. I hope to continue working on research that is helpful to standard setters in coming up with standards that ultimately improve financial reporting.
Teaching: Corporate Financial Reporting (MBA)
Most excited about: I love how interconnected the area groups are within Haas. There are so many potential learning opportunities, especially for a newly minted researcher like me.
Fun fact: In my free time, I love to read and play the piano—I had learned it as a child and am trying to relearn it now as an adult.
Carolyn Stein
Assistant Professor Carolyn Stein, Economic Analysis & Policy
(she/her)
Hometown: Lexington, Mass.
Education:
PhD, Economics, MIT
AB, Applied Mathematics and Economics, Harvard College
Research focus: Economics of science, innovation, and applied microeconomics
Introduction: I study the economics of science and innovation. My research combines data and economic theory to understand the incentives that scientists face and decisions that they make, and how this in turn shapes the production of new knowledge.
One thing I love about economics is that it’s less of a narrow subject area, and more a set of tools and principles that apply to a stunningly wide array of topics. I’m excited to work with Haas students to help them understand how economic principles can improve their decision-making, both in their careers and in other areas of their lives—maybe even in ways that surprise them!
Teaching: Microeconomics (EWMBA)
Most excited about: I’m excited to be part of a large and superb applied microeconomics community—at Haas, and more broadly at Berkeley as a whole.
Fun fact: I am an avid cyclist and skier, and I was on the cycling team at MIT. Since moving to the Bay Area, I’ve loved the hills and mountains in the area. I’m working on taking my riding off road (gravel and mountain biking) and skiing off-piste (backcountry).
Sytske Wijnsma
Assistant Professor Sytkse Wijnsma, Operations and IT Management
(she/her)
Hometown: Amsterdam, the Netherlands
Education:
PhD, Management Science and Operations, Judge Business School, University of Cambridge
MPhil, Management Science and Operations, Judge Business School, University of Cambridge
BSc & MSc, Economics and Finance, VU University, Amsterdam
Research focus: My primary research interest is designing supply chain and policy interventions that help solve real-world challenges with social and environmental impact.
Introduction: I am very excited about my projects on illicit supply chains and how they undermine social and environmental goals. The context of these projects spans a wide range of areas, from illicit waste management to illegal deforestation. I am also excited to deepen and expand ongoing research collaborations with governments and industry to investigate these issues.
Teaching: Sustainability in Business (Undergraduate)
Most excited about: Many things! Berkeley Haas, being at the forefront of sustainability, has a unique position that combines the same ideals that drive my research with opportunities for collaborative research with serious impact. The amazing colleagues and close connections to industry make it even more exciting to join this community!
Fun fact: My first and last name originate from Fryslân, a northern province in the Netherlands, where it is still tradition to name your children after family members. So although my name is quite rare in the rest of the world, in our family it crops up in every generation!
Valerie Zhang
Assistant Professor Valerie Zhang, Accounting
(she/her)
Hometown: Shanghai, China
Education:
PhD, Northwestern Kellogg School of Management
MA, Economics, University of Toronto
BCom, Finance and Economics, University of Toronto
Research focus: Information dissemination; information cascades on social media; retail investor behavior; decentralized finance
Introduction: I am passionate about doing research or working on personal projects that can express my creativity. I enjoy merging disjointed ideas and working on interdisciplinary research. My dissertation combines two literatures: one in computer science on information cascades on social media, and another in finance and accounting on the effects of disseminating financial news. I am also very curious about emerging technologies that are reshaping the financial industry. Since I work on areas that are new to the research community, I sometimes feel like a lone traveler exploring completely new territories. It is terrifying but also extremely rewarding!
Teaching: Financial Accounting (Undergraduate)
Most excited about: I look forward to inspiring my students to be entrepreneurial and to come up with creative business ideas or projects.
Fun fact/hobby: I write short stories. The one I am working on has an alien and a squirrel in it.
As regulators wrestle with disclosure standards for the burgeoning $35 trillion ESG investing industry—named for its focus on corporations’ environmental, social, and governance activities—a group of influential thought leaders is gathering at Berkeley Haas to share their expertise.
“The timing and the content of the conference are unique,” says Panos Patatoukas, associate professor of accounting at Berkeley Haas and faculty director of the Center for Financial Reporting and Management (CFRM), which organized the event. “Our set of panelists and moderators are at the cutting edge of the ESG investing world and represent a wide range of perspectives, including ESG strategies, scoring and indexing, investing, regulation, and sustainability reporting standards.”
The importance of measurement, standardization, and verification is becoming more urgent as ESG investing grows, and the amount of capital allocated in ESG indices and financial products has exploded. For example, the SEC recently fined Bank of New York Mellon over misleading claims about funds that use environmental and social criteria to pick stocks. A transparent standard setting process can play a crucial role in advancing the clarity that investors and businesses are asking for in the area of ESG disclosures, Patatoukas says.
ESG from four angles
The conference will approach ESG accounting from four main angles, Patatoukas says: disclosure, assurance, standardization, and valuation and investing. After an introduction from Dean Ann Harrison, the first panel will focus on measurement and disclosure, and will be moderated by James Webb, executive director of the CFRM.
Next, Andrew Behar, CEO of As You Sow, a nonprofit that uses shareholder advocacy to “create lasting change by protecting human rights, reducing toxic waste, and aligning investments with values,” will lead a discussion on ESG advisory and auditing, with partners from PwC, KPMG, Deloitte, and Moss Adams.
Berkeley Law Professor Stavros Gadinis will moderate two keynote addresses: SEC Commissioner Hester M. Peirce will speak on ESG reporting regulations, and Janine Guillot, CEO of the Value Reporting Foundation, will speak on reporting standards.
The afternoon discussion of ESG valuation and investing will feature AJ Lindeman, Bloomberg’s head of Index and ESG Research; Wall Street Journal Senior Columnist James Mackintosh, and Karen Wong, head of ESG & Sustainable Investing for State Street Global Advisors. Patatoukas will moderate.
The event, which is the 26th annual Conference on Financial Reporting, will run from 9 a.m. to 4 p.m. in Chou Hall’s Spieker Forum on the Haas campus.Registration is open to all. Attendees can receive CPA Continuing Education credits.
The unthinkable is happening. Putin started an aggressive war against the people of Ukraine, a fellow Slav country in the middle of Europe. Babi Yar, a place where many thousands of people were shot by Hitler’s army to prove an insane racial theory, is where people are killed again by Putin’s army.
Putin rattles nuclear weapons to scare the world. And yet money from Russian oil and gas exports are flowing to Putin’s coffers to pay for death and destruction.
History will judge harshly those who have enabled Putin’s regime. Gerhard Schröder will not be remembered as a chancellor of proud Germany. He will be remembered as somebody who corrupted Germany and contributed to the rise of Putin.
The “reasons” for Nord Stream 2, a Germany-Russia gas pipeline bypassing Ukraine and thus lowering the cost of Russian invasion into Ukraine, look ludicrous in retrospect and it will stain everybody who was involved in it.
This is not the first moral error and it almost surely will not be the last.
It was morally wrong to buy anything from IG Farben that produced Cyclone B, a gas used to exterminate Jews in concentration camps. It was morally wrong to buy anything from the apartheid regime in South Africa. It was morally wrong to buy oil from Saddam Hussein who used chemical weapons to kill civilians.
But humanity makes progress by learning from mistakes. And the moral compass gives a clear bearing here: the civilized world must impose sanctions on Russian energy exports to raise the cost of war for Putin.
The economic calculus is clear too. Yes, energy prices will increase. They have increased already as private corporations shied away from Russian oil to avoid running afoul of potential sanctions. And while higher energy prices can seem inconvenient, they may not be that costly in the end. Indeed, the marvel of a market economy is that it always finds ways around scarce resources. Supply will increase.
Energy will be used more efficiently, thus reducing pollution and emissions. Alternative energy sources will be pursued more intensively. Transportation networks will adjust. Reserves may be used to attenuate price increases. The global economy is much more resilient than many people think. For example, sanctions on Iran, a major oil producer, resulted in only short-lived increases in the price of oil.
On the other hand, think about the cost of a new arms race that will be triggered if Putin succeeds in conquering Ukraine because no country will feel safe. This arms race has already begun as Germany (!) increased its military spending and committed to more increases in the future. And this will get worse.
U.S. military spending as the percentage of gross domestic product (Bureau of Economic Analysis)
At the height of the Cold War, military spending in the U.S. accounted for almost 10 percent of the gross domestic product. This would correspond to 2 trillion dollars today. Think about it: 2 trillion dollars per year. In the U.S. alone.
This is the money that could be spent on education, healthcare, infrastructure, etc. The “peace dividend” after the end of the Cold War allowed the world to have a new era of prosperity. This dividend should be protected.
The balance is clear: sanctions on Russian energy will cripple the Russian economy, and they will carry a small price to pay for preserving the global security.
We can only ask ourselves now whether a credible promise to impose massive economic sanctions on Russia could have deterred Putin from the invasion. He certainly did not believe that whatever he was warned about was credible.
But every day of the Russian war in Ukraine—with bombings of cities and shelling of a nuclear power plant—makes these questions come back, just like we ask ourselves decades later whether Hitler could have been stopped earlier. The free world can prevent unspeakable tragedies. Energy sanctions are a moral step in that direction.
Ryan Murphy, BS 17 (left), and USA swimming teammates Michael Andrew, Caeleb Dressel, and Zach Apple at the medal ceremony for the men’s 4×100 medley relay on August 1. Photo: Oliver Weiken/picture-alliance/dpa/AP Images
Congratulations to our four Haas bears competing in the Tokyo Olympics. You make us proud!
Champion backstroker Ryan Murphy, BS 17, and his teammates captured gold in the men’s 4x100m medley relay on Sunday, breaking the 12-year-old world record for the event by half a second. It was the 4th gold medal for Murphy, who served as this year’s team captain for USA swimming. Murphy also won silver in the men’s 200m backstroke, and bronze in the men’s 100m backstroke.
Golfer Collin Morikawa, BS 19, narrowly missed the bronze medal (by one stroke) and came in 4th in the men’s golf tournament.
Rising senior Alicia Wilson, BS 22, came in 8th in the women’s 200m individual medley, swimming for Great Britain.
Still to come: Johnny Hooper, BS 19, will compete in the men’s water polo quarterfinals tonight (Tuesday, Aug. 3), at 10pm PDT. See full finals schedule here.
Berkeley, Calif. — UC Berkeley’s Haas School of Business announced a new flexible online option for its top-ranked, part-time Evening & Weekend MBA Program. The new Flex option offers the same curriculum and faculty and the same Berkeley Haas MBA degree in a highly customized and flexible online and on-campus format.
Students enrolled in the Flex option will take their core MBA courses online. After completing their first three semesters of the core curriculum, students can take their elective courses either in person on the Berkeley Haas campus or online.
Applications for the Flex option will open on August 17 through the Evening & Weekend MBA Program (EWMBA). The first group of about 60 Flex students will enroll in July of 2022.
The Flex option will be part of the Berkeley Haas Evening & Weekend MBA Program, which is ranked #2 among part-time MBA programs by U.S. News. The program typically takes three years to complete, with some students completing their degree in just 2.5 years.
“Students in the Flex cohort can get a top-ranked Berkeley Haas MBA from anywhere, without the commute to campus every week,” said Dean Ann E. Harrison. “They will have flexibility in how they complete their MBA program. Yet they can also enjoy the in-person and campus experience, giving them the ability to access the extracurricular experiences Berkeley and Haas have to offer.”
The Flex option is designed for high-achieving and ambitious professionals with five or more years of professional work experience who seek additional skills to advance in their careers or to change jobs. They will join a network of 41,000 Haas alumni around the world.
In the Flex option, 40% to 60% of the online core courses will be delivered synchronously to create a robust, cohort-based learning experience. The significant percentage of synchronous content ensures that Flex students have the same opportunity for discussion and feedback as students in on-campus courses. Students will be assigned to study teams that are carefully selected for diverse skills and backgrounds, ensuring that students learn as much from each other as they do in the classroom.
Given the importance of community in our EWMBA program, the Flex option also includes five in-person events:
WE Launch, the required orientation over a long weekend (Friday through Sunday) in late July on the Berkeley Haas campus.
Leadership Communication, a required course taught on the Berkeley Haas campus as a weekend immersion (Friday through Sunday) in the second half of the second semester.
RE Launch, an optional weekend immersion on the Berkeley Haas campus in October of the third semester.
Business Communications in Diverse Environments, a required weekend immersion (Friday through Sunday), taught typically at a resort site in Napa Valley on the Martin Luther King Jr. holiday weekend in January of the fourth semester.
WE Lead, an optional weekend celebration and reflection on the MBA experience held in May of the graduation year.
“In this fast-changing environment, our MBA experience provides professionals not only with a rigorous management education but also with an understanding of how innovation, inclusion, and sustainability will shape the future of business,” said Dean Harrison. “Our innovative courses will help prepare our students for what’s next, addressing a wide range of workplace challenges—from questioning the ethics of artificial intelligence to recognizing how unconscious bias impacts management decisions.”
In 2022, Haas will celebrate the 50th anniversary of its part-time MBA program. “We think the creation of this new Flex cohort reflects our commitment to innovation and UC Berkeley’s mission,” said Jamie Breen, Assistant Dean, MBA Programs for Working Professionals, who oversees the new Flex option.
As the second-oldest business school in the United States, Berkeley Haas has been questioning the status quo since its founding in 1898. It provides research, thought leadership, and talent development to lead the way to a more inclusive and sustainable future.
The award was created by the Academic Senate’s Committee on Teaching to honor faculty, staff, and student instructors who embraced the challenges posed by the COVID-19 pandemic and engaged in or supported excellent teaching.
“These instructors and staff used innovative methods and worked beyond their traditional roles to ensure that students remained engaged and supported, and were challenged to do meaningful work under extraordinary circumstances,” wrote the award committee.
Jay Stowsky
Stowsky has served as senior assistant dean for instruction for 14 years, and at Haas for 24 years. He played a critical role in overseeing the transition from live to remote classes.
“Working to match the engagement level of a live, physical classroom has involved hours of brainstorming, planning, workshop training, and investments in a host of new technologies,” wrote Stowsky, who is retiring at the end of the semester. “It has been fascinating, and challenging, to conceptualize, organize and operationalize this goal with the faculty, graduate student instructors, and technology teams at Haas.”
Remote learning innovations at Haas included the installation of four state-of-the-art virtual classrooms, technical upgrades to regular classrooms for virtual teaching, regularly scheduled faculty-student engagement sessions, improvements in production quality of digitized asynchronous content, a remote instruction workshop series for faculty, and tech training.
Peter Goodson
Goodson is a distinguished teaching fellow and continuing lecturer who has taught popular courses on mergers & acquisitions, private equity, and turnarounds to MBA students since 2004. After the pandemic forced all courses online, he invested “hundreds of hours repurposing content and delivery” to transform his courses.
“Our lofty goal was to deliver a ‘value proposition’ that was as good as or better than the in-person model,” he wrote of the experience. “Our team designed an online classroom experience that is optimized for student engagement; altered curricula to showcase students’ company’s pandemic strategies; published COVID MBA cases (including the first at Berkeley Haas); established rigorous and equitable inclusion; and created a feedback system to continuously improve the course.”
The result was courses where students were highly engaged and rated among the very best experiences they’d had with online learning.
Goodson and Stowsky are among 38 individuals and teams selected from 500 nominees for the award. See the full list of honorees.
L-R: StEP program co-founders Santiago Freyria, Francesco Dipierro, and Santiago Pezzoni.
When Santiago Pezzoni isn’t in his Berkeley Haas MBA classes, he’s running his fintech startup, Digiventures.
And when he’s not running Digiventures, he’s helping other UC Berkeley students start their own companies as co-founder and program manager of StEP (Student Entrepreneurship Program), a 10-week campus-wide incubator that has so far assisted 120 startups.
“There are so many people on campus—PhDs, postdocs, engineers—who have fantastic ideas and technologies, but you ask them ‘how will you make that a business?’ and they say, ‘I’m not sure,’” said Pezzoni, MBA 21, who co-founded StEP with Santiago Freyria and Francesco Dipierro, both MBA 20. “We’re figuring out how to get them involved and help them take their fantastic ideas into the world.”
Launched in 2019, StEP is a cross-collaboration among Berkeley student clubs, faculty, entrepreneurship organizations, and VCs. It aims to fill a gap the founders discovered in the campus startup ecosystem.
“Our research found that while more than 80% of Haas students we interviewed took entrepreneurship classes or had startup ideas, less than 5% were able to access accelerators or pre-seed funding,” Pezzoni said.
“Our research found that while more than 80% of Haas students we interviewed took entrepreneurship classes or had startup ideas, less than 5% were able to access accelerators or pre-seed funding.” — Santiago Pezzoni.
Berkeley students, faculty or alumni can apply to StEP as teams or individuals, and opt to be matched with others. All of the teams meet on Zoom weekly, using skills they learn in StEP to take their ideas forward. They also meet separately each week with mentors to review goals and achievements. At the end of the program, teams pitch their startup plans to investors.
StEP applicants choose one of two paths, depending on whether they are looking for help with an idea or want to be matched with others who already have an idea. The program’s founders reach across programs and schools to find people with the right skill sets needed by the new teams. Later, the founders work to connect the teams with investors who can provide early-stage capital.
“You only do it if you really love this”
So far, 120 startups have completed the StEP program, and 30% of them still exist. About a quarter of participants are from Haas, including Dispatch Goods, founded by Lindsey Hoell, who was last year’s StEP showcase winner and is now growing her company at UC Berkeley SkyDeck, a partnership among Haas, Berkeley Engineering, and the Office of the Vice Chancellor for Research.
Pezzoni, who won the LAUNCH program last year with Digiventures, said StEP helps students to clarify whether the startup life is for them. “Being an entrepreneur is not a sexy life,” he said. “It’s tough, and you only do it if you really love this. You have to decide why you want to be a founder.”
“Being an entrepreneur is not a sexy life,” he said. “It’s tough, and you only do it if you really love this. You have to decide why you want to be a founder.”
StEP’s founders say they work about 20 hours a week apiece on the program, chatting often with startup stakeholders across campus including Rhonda Shrader, executive director of the Berkeley Haas Entrepreneurship Program (BHEP), Caroline Winnett, executive director of Berkeley SkyDeck, and former Haas Dean Rich Lyons, now UC Berkeley’s Chief Innovation and Entrepreneurship Officer, who supported StEP from its inception.
Moving through the startup ecosystem
The typical trajectory for new startup teams is to start with a program like StEP and continue with a Berkeley program like NSF I-Corps , CITRIS Foundry, Form+Fund, and then, with that experience under their belts, apply to the LAUNCH incubator program. María del Mar Londoño, MBA 21, founder of SuperPetfoods, won the StEP finals two years ago and continued on to the LAUNCH finals. StEP co-founder Freyria also went through LAUNCH as a co-founder of Callisto Spirits, a botanical rum maker that raised $650,000.
Bernardo Magnani, MBA 21, who is part of the StEP leadership team, left a consulting career to co-found Lastbit, and was accepted to the prestigious Y Combinator startup accelerator program. Magnani just raised $2 million for the company, which allows customers to make instant low-cost global Bitcoin payments.
“I’m such a fan of StEP,” Shrader said. “Sometimes the hardest part of entrepreneurship is just finding a teammate or asking a bunch of questions with people who are all learning together. StEP is just a beautiful resource for the campus—designed and delivered by students.”
The passion to keep building the program unites the StEP team, Dipierro said.
“We’re working to build something that will continue, that can be sustainable at UC Berkeley for the next 10 years,” he said.
Last year, when Berkeley Haas finance professor Terrance Odean was researching why users of the popular trading app Robinhood tended to “herd” into a small number of stocks, he never imagined a situation like what unfolded last week with GameStop.
“It was like a supernova of herding events,” he said.
Shares in the moribund video-game retailer soared more than 400% over three days when a mob of investors—many congregating on the Reddit chat room WallStreetBets—coordinated to buy the stock en masse. It fell 44% the next day as Robinhood and other brokerage firms temporarily curbed new purchases of GameStop. Although trading has been restored, the stock has been mostly down but remains volatile. Tens of billions of dollars of market value have been created and erased.
Odean had been examining how Robinhood’s easy-to-use technology drives investor behavior and share prices. The Menlo Park company, founded in 2013, has built an enormous following, especially among young investors. It was “the first brokerage to offer commission-free trading on a convenient, simple, and engaging mobile app,” Odean wrote in a working paper he co-authored with three other finance professors.
Making trading fun
The Robinhood app makes investing fun and—critics say—addictive. New members get a free share of stock after they scratch off the image of a lottery ticket, and when they reach certain milestones, digital confetti rains down on their screen. Robinhood users can begin trading as soon as they open an account.
“Half of Robinhood users are first-time investors, who are unlikely to have developed their own clear criteria for buying a stock,” the paper says. “The app prominently displays lists of stocks in an environment relatively free of complex information. For example … Robinhood only provides five charting indicators, while TD Ameritrade provides 489.”
The app focuses attention on Robinhood’s 100 “Most Popular stocks,” and a narrower “Top Mover” list that shows which 20 stocks, throughout the day, have the biggest positive or negative percentage changes.
Using Robintrack, a database of the most popular stocks among Robinhood users from May 2018 until August 2020, the researchers compared trading by its users to other retail investors. They also looked at trading in “attention-grabbing” stocks on three days when Robinhood system outages prevented its users from trading.
They concluded that the simplicity of Robinhood’s app, combined with its users’ inexperience, made them more likely to herd, or pile into a smaller set of stocks, than other retail investors.
Short sellers took note
They also looked at what happened to a stock’s price when it was subject to a herding event or “extreme herding” event, the latter being days when the number of Robinhood users who own a stock grew by 1,000 users and 50% from the previous day. These stocks posted abnormally large gains on the day of herding—averaging 14% for a regular herding event and 42% for an extreme herding event. The next day, however, returns turned “significantly negative” and were still down—5% and 9%, respectively—after 20 days.
“While some Robinhood users undoubtedly made money, in our analysis, a greater number of them lost money,” Odean said.
The team also documented a “marked increase in short selling for stocks involved in Robinhood herding events,” a sign that some investors have been exploiting these “predictably negative returns” by placing bets that Robinhood favorites will fall. The paper’s co-authors are Brad Barber of UC Davis, Chris Schwarz of UC Irvine and Xing Huang of Washington University in St. Louis.
We asked Odean about Robinhood, GameStop and lessons to be learned from recent events.
Q: Did you ever dream there would be a herding event like GameStop?
A: It would be lovely to say I saw it coming, but no. What we are seeing with Robinhood is herding similar to what’s been documented in other situations, but previously the magnitudes have been much lower. We saw herding in the 1970s and 1980s, when people on Monday would buy stocks mentioned Friday evening on Louis Rukeyser’s Wall Street Week, a public-television show. Now what you have is a lot more investors having their attention funneled into what is often a small set of illiquid stocks and buying at the same time.
What’s surprising about GameStop was the extent to which people were writing (primarily on the Reddit chatroom WallStreetBets) about how we will all consciously do the same thing at the same time and thus possibly affect market prices. That aspect of the GameStop fiasco is not in our paper.
Is what you just described illegal?
I’m not an attorney but my understanding is, if two hedge funds started sending emails to each other saying if we both buy these stocks in large numbers on Tuesday, that will drive the price through the roof—that would probably be illegal.
I’m not sure what will happen with GameStop, but it’s a lot harder to make a case against millions of people spending small amounts of money than against a small number of sophisticated investors doing this with a lot of money.
I’m not sure what will happen with GameStop, but it’s a lot harder to make a case against millions of people spending small amounts of money than against a small number of sophisticated investors doing this with a lot of money.
Has Robinhood made investing too simple?
It has changed people’s behavior by making it simple. Robinhood’s mission statement is to democratize investing for all. Jack Bogle (founder of Vanguard Group) did that years ago. You can buy a Vanguard index fund, pay $4 a year for every $10,000 you have invested and have a well diversified, long-term investment in the market and the U.S. economy. That’s democratization. What Robinhood has done is make it easy to trade.
How does Robinhood make money?
Hand over fist. They sell their customer’s orders to market makers. If you want to sell, the market makers buy from you, and vice versa. When market makers take the other side of a trade, they face asymmetric information risk—the risk that they are trading with someone who knows more than they do. Market makers seem to think that when they trade with someone from Robinhood, they are not taking that risk. They think, if I always take the opposite side of the trade from the side Robinhood is on, I will make so much money I can pay Robinhood.
This is called “payment for order flow,” and it’s not new. Other retail brokerage firms also do it.
(In December 2020, the Securities and Exchange Commission charged Robinhood with failing to properly disclose its payments for order flow to customers and failing to seek the best terms for their trades. Robinhood paid $65 million to settle the changes without admitting or denying guilt.)
Should regulators outlaw this practice?
It’s complicated. Without payment for order flow, there won’t be commission-free trading. My concern is that investors are only aware of costs that are direct and explicit. Most investors are aware of commissions, but not payment for order flow. If investors mistakenly believe that zero commissions means free trading, they are likely to trade more actively and more speculatively. I believe that we should get rid of payment for order flow, but one has to be careful about the unintended consequences of well-intended regulations.
What is the most important lesson to take away from this GameStop event?
Retail investors whose trades are highly correlated—through forums such as WallStreetBets or other means—have more market power than many people on Wall Street expected.
Retail investors whose trades are highly correlated—through forums such as WallStreetBets or other means—have more market power than many people on Wall Street expected.
Why did Robinhood temporarily halt new purchases in Gamestock, AMC and other stocks subject to extreme volatility?
Depository Trust and Clearing Corporation (the clearing house for Robinhood’s trades) required Robinhood to put up more capital to ensure that Robinhood would make good on the trades it placed for its clients. Brokerages are required to use their own money as collateral while they wait for trades to clear. Robinhood’s clearing house increased its capital requirement because of the surge in orders in GameStop and some other stocks and because these stocks became hugely volatile. Robinhood reopened trading after it raised $3.4 billion in additional capital.
Traders allegedly targeted companies like GameStop because a large percentage of their shares had been sold short by hedge funds and others. This means the short sellers borrowed GameStop shares and sold them, hoping to buy them back later at a lower price and pocket the difference. When GameStop shares skyrocketed, hedge funds suffered massive losses when they had to buy the shares at higher prices, which put even more upward pressure on GameStop shares. Some traders are portraying short sellers as the “bad guys” and Robinhood traders as “good guys.” Are there really any good guys and bad guys here?
Financial economists believe that short selling plays a useful role in markets by enabling investors with negative information or opinions about a stock to influence prices and thus keep prices from being set only by investors with optimistic views. Short sellers do, however, sometimes behave badly by promoting negative rumors about companies after they’ve established their short positions. I have not read that this was a major problem with GameStop. I would say that people who intentionally manipulate stock prices qualify as bad guys. And Jack Bogle—who tried to make investing less expensive and safer—was a good guy.
Adair Morse, an associate professor of finance at the Haas School of Business, has been named to the Biden Administration’s treasury department as deputy assistant secretary of capital access in the Office of Domestic Finance.
“I’m thrilled to have the opportunity to serve in the Biden Administration and to join the team at treasury, serving the people of this great country,” said Morse, the Soloman P. Lee Chair in Business Ethics, who is taking a leave from the Haas Finance Group to commit to her new role.
“We will miss Adair at Haas, where she has conducted groundbreaking finance research and launched the Sustainable and Impact Finance (SAIF) initiative with (former Haas Dean) Laura Tyson to train many new leaders in the field,” said Dean Ann Harrison. “She has already made an impact in helping small businesses in California through her work on the California Rebuilding Fund. I have no doubt she will have an even greater impact on a national scale.”
The Office of Domestic Finance develops policies and guidance in the areas of financial institutions, regulation, capital markets, and federal debt finance. Its community and economic development division coordinates small business finance and development, housing policy, capital access, and issues related to underserved communities.
Morse, who holds a PhD in finance from the University of Michigan’s Ross School and two master’s degrees from Purdue University, joined Haas in 2012 from the University of Chicago’s Booth School of Business. Her research interests include equity issues in financial services and algorithms, small business survival, sustainable investing, discrimination and corruption, venture capital, and pension management. The unifying theme in her work, she has said, is “leveling economic playing fields.”
“Adair’s groundbreaking research has looked at important issues, like small business survival in the city of Oakland, consumer lending discrimation in fintech, and the pervasiveness of corporate fraud,” said Prof. Catherine Wolfram, associate dean for Academic Affairs and chair of the faculty. “As a pioneering, creative thinker in so many areas, she will have plenty of opportunity to bring her financial and social impact leadership to the table.”
As a pioneering, creative thinker in so many areas, she will have plenty of opportunity to bring her financial and social impact leadership to the table. —Prof. Catherine Wolfram, chair of the faculty
Morse has spent much of the pandemic using her finance expertise to try to help small businesses. Last spring, Morse and Tyson began working on a strategy to use public capital to attract private lenders to provide low-interest credit to help vulnerable small businesses get through the crisis. They first helped develop a program with the City of Berkeley, and then worked with others—including Yellen, who was then on Gov. Newsom’s Task Force on Jobs and Competitiveness—to implement an innovative public-private loan structure at the state level. Their work helped launch the California Rebuilding Fund, run by the Governors’ Office of Business and Economic Development (GO-Biz) and aimed at some of the state’s smallest businesses in under-resourced communities.
At Berkeley Haas, Morse also ran the Haas Impact Fund and Sustainable Investment Fund curriculum, managing two endowment funds with Haas students. The Sustainable Investment Fund is the first and largest student-led Socially Responsible Investing (SRI) fund within a leading business school.Until recently, Morse served on the Governance and Allocations Committee of the California Rebuilding Fund, as well as on the expert panel for the Norwegian sovereign wealth fund, advising on issues of sustainability and innovation.
Kathryn
“We believe that developing a sustainable, climate-resilient economy goes into every aspect of business—whether it’s agriculture, real estate, energy, finance, anything and everything will need to be reimagined and redesigned to address the current environmental, social, and economic crises,” said Harrison. “We really believe here at Haas that addressing our climate crisis and transitioning to a carbon free energy source is an integral component of the world’s sustainable future.” 
Still to come: 
