The hedge-fund deity spared Herbalife but showed no inkling of his responsibility to act above suspicion, writes senior editor Igor Greenwald.

David Einhorn represents everything that’s wrong with modern finance. And it’s not because he’s so powerful and wealthy, or because he’s a frequent short-seller, or because he speculates with other people’s money.

His real failing is in thinking that his celebrity and ability to move market prices don’t impose any special obligations beyond those enumerated in securities laws. As I’ve argued recently, that’s irresponsible behavior worthy of a sociopath.

To recap briefly, Einhorn popped up on Herbalife’s (HLF) earnings conference call two weeks ago and asked a couple of leading questions about accounting and distributor incentives before thanking executives for their time. Whereupon the stock, which had been poised to challenge its recent record high based on strong results, promptly fell 20% on the day and a total of 40%.

The assumption was that Einhorn would reveal he is short the stock at yesterday’s Ira Sohn Investment Conference in New York. The Sohn is described as a fundraiser for pediatric cancer research, but really it’s an opportunity for our hedge-fund overlords to float some stock tips and show the world which whale really has the biggest tail.

So there were the assorted masters of the universe, packed into the Avery Fisher Hall at Lincoln Center and waiting for pearls of wisdom from the Lehman Killer, Green Mountain (GMCR) Roaster and Herbalife Slimmer, aka Voldeshort.

Einhorn’s first slide? A picture of Bart Simpson at a blackboard inscribed with “I will not pretend to be David Einhorn on earnings calls.”

See, it was all a prank, a real knee-slapper. Maybe not to investors who have seen $3.3 billion in market value wiped out on unsubstantiated assumptions about Einhorn’s suspicions—suspicions Einhorn fanned and then didn’t bother to clarify. But to Einhorn, this sort of deterministic Midas touch must seem pretty funny indeed.

He didn’t mention Herbalife in his presentation. The stock rallied 17% as a result.

We still don’t know whether Voldeshort is in fact betting against Herbalife or whether this is just what aging boy geniuses denied a baseball team must do for fun. But what we do know definitively is that Wall Street has finally found its new object of fetishistic worship, and will now value all assets as this deity demands.

Einhorn is drunk on power and so are his followers. Coverage of the Herbalife call and the Sohn conference has focused on his ability to move the market without a second thought to the ethics of taking down a stock with nothing more than innuendo.

Einhorn and his fund have already been fined $11.5 million by the UK’s Financial Services Authority for acting on non-public information in paring their stake in the Punch pub chain ahead of a highly dilutive share offering. So the presumption is that he’s acting on excellent legal advice in toying with Herbalife and Herbalife shareholders.

And the Securities and Exchange Commission is missing in action as usual, contributing to the impression that anyone can yell fire in a crowded theater, the more so if that anyone is someone rich and powerful. The First Amendment gives everyone the right to say what they want, apparently including, “My good sir, is that smoke I see coming from the cloakroom?”

But there are rights and there are responsibilities conferred by great wealth and power, responsibilities apparently as foreign to David Einhorn as they are to Bart Simpson. Could he really not have learned about noblesse oblige while researching the likelihood of the French default? And when will public watchdogs help educate him?

I’ve held on to those Herbalife calls purchased at the beginning of the month and in fact bought the stock for relatives just as Einhorn was starting to speak yesterday. But others have been badly hurt.

And collectively we ought to be ashamed. Einhorn, with his carte blanche to make or break a stock, is a demon of our own invention.