Con Artists at Work on Wall Street
Con Artists On Wall Street
© 2009Megan L. Hunter, MBA Print this article.
Reports of financial fraud on Wall Street causing losses in the millions for many Americans have been front and center recently. The most striking case of late is the Bernie Madoff scandal although he's just one of many recent cases. Investors, both individuals and businesses, some of which were non-profit organizations, lost around $50 billion. Shocking? Clearly. Devastating? Undeniably. Especially to those whose individual retirements or organizational viability were wholly dependent on those investments.
While this was a stunning shock to all of us, what was more shocking was the level of financial intelligence of the investors who lost millions. These weren’t first-time investors unfamiliar with the financial landscape. They didn’t appear to be foolishly taking risks as though they were playing slots in Vegas. Why then did financially savvy, prudent, intelligent investors entrust their future with a single individual who ended up destroying their financial security? It isn’t logical.
Adding to the lack of logic, we learned that it was nothing more than a simple pyramid scheme – not a complex, multi-layered, scientifically formulated plot. Why did a simple scam remain undetected by those same financially savvy folks? Again, it defies logic.
While some may attribute their seemingly illogical actions to greed, I don’t believe that greed alone was the common factor. It may have been a contributor but it alone does not answer the question.
So, what is the answer? Why did people trust this man? No one would entrust millions to just anyone. Why did they trust Madoff? Listening to swindled investors in TV interviews, a common thread is easily detected. Madoff was charming and they believed him when he said, “trust me”. Now they call him a psychopath.
It doesn’t take a rocket scientist to know that Madoff nor his actions could be considered even close to the realm of normalcy or that he just got a little off-track. What he did was cunningly calculated, as evidenced by the length of time he managed to pull it off and his lack of remorse upon arrest. The Journal of Clinical Psychiatry, July 2008 reports that a National Institutes of Health study of over 35,000 people found that 6.2% of the population have Narcissistic Personality Disorder. An earlier wave of the study indicated that 3.6% have Antisocial Personality Disorder, with about a 20% overlap of both NPD and ASPD. The combined traits of these are a grandiose sense of self-importance and entitlement, demanding of special treatment and admiration, relationship exploitation, arrogance, lack of empathy and remorse, lying/conning, and violation of social norms/laws.
Could this be Madoff? What do you think?
We need to learn something from this nightmare. Not only because we’re in a tough economic environment at the moment, but because we must always be aware of those to whom we entrust our money and our financial well-being. So, how do you know who to trust with your investments and financial future? Bottom line – beware of anyone who comes off as overly charming and implores you to “…just trust me”.
Trust me, that’s a glaring red flag (pun intended)!
Just like your mother told you, if it’s too good to be true, the probability is pretty high that it is. Many of the defrauded investors recalled thinking in the beginning that it sounded too good to be true. That’s where the red flag should have surfaced and further investigation should have been conducted.
Before trusting your finances with anyone, follow these simple guidelines:
Don’t trust based merely on someone’s assertion that they are trustworthy or have the “magic” formula.
Don’t trust based on word-of-mouth from another investor.
If it’s too good to be true --- run from it.
Avoid being seduced by a charmer.
Beware of people who say “trust me”.
Conduct your own research.
You worked hard to save for your future. Don’t let it disappear because of a charming personality.
Megan Hunter, MBA, is an international speaker and author on the topic of high-conflict disputes and complicated relationships. She is the co-founder of the High Conflict Institute with Bill Eddy, LCSW, Esq., and founder of Unhooked Media and the author of Bait & Switch: Saving Your Relationship after Incredible Romance Turns into Exhausting Chaos. Read more about HCI speaker and trainer Megan Hunter and visit UnhookedMedia.com.