The Con Men: A History of Financial Fraud and the Lessons You Can Learn by Leo Gough
|The Con Men: A History of Financial Fraud and the Lessons You Can Learn by Leo Gough|
|Category: Business and Finance|
|Reviewer: Peter Magee|
|Summary: A comprehensive and well-writen study of the pitfalls which led a number of otherwise sophisticated investors to lose a considerable sum of money in various dodgy investment schemes.|
|Buy? Yes||Borrow? Yes|
|Pages: 224||Date: August 2013|
|Publisher: FT Publishing|
Most people will recognise the now-infamous Bernie Madoff and Allen Stanford as crooks who swindled thousands of investors of their hard-earned savings but at one time these individuals had gained stellar reputations in the financial world. In fact Madoff was a former chairman of NASDAQ (originally the National Association of Securities Dealers Automated Quotations - now the second-largest stock market comparing to official stock exchanges by market capitalization in the world) and well respected. He’s currently serving 150 in prison for running a 65 billion dollar Ponzi scheme, whilst Stanford was sentenced to 110 years for the same offence. How did they get away with it? This book will tell you how.
It’s easy - but simplistic - to write off what happened as down to the gullibility of investors. Most people will have been reassured by checks and balances which appeared to be in place - for example that accounts were audited by such seemingly reputable accountancy firms as Arthur Andersen. (It was the failure to detect fraud which led to the collapse of Arthur Andersen following the Enron scandal.) Additionally, widespread advertising of new products may well have encouraged investors to forget that if something seems too good to be true then it probably is.. Time and time again the importance was shown of understanding the product on offer. It’s difficult to be too critical though when the recent financial crisis demonstrated that many senior bankers didn’t fully understand the products. Perversely, it would be the financial crisis which finally brought Madoff and others to book when the well ran dry.
You might be forgiven for thinking that gold would be a safe haven in a time of crisis in the financial markets - but you would be wrong. It was Warren Buffett who identified that if trouble in the financial markets leads to a collapse in society as a whole then you would be hard pressed to use a gold bar to meet commitments on a day to day basis.
Leo Gough writes about a complex subject in language that’s easy to follow and for the layman to understand. It isn’t confined to financial shenanigans in the USA - many of us will recall the spectacular collapse of the Polly Peck empire and the downfall of the principal player and CEO, Asil Nadir. The final chapters contain essential advice on how the investor can avoid falling into similar traps in the future.
I’d like to thank the publishers for sending a copy of the book to the Bookbag.
If this book appeals then we think that you might also enjoy The Fall of the House of Credit by Alistair Milne. Cautious investor will undoubtedly appreciate The Long and the Short of it: A Guide to Finance and Investment for Normally Intelligent People Who Aren't in the Industry by John Kay.
You can read more book reviews or buy The Con Men: A History of Financial Fraud and the Lessons You Can Learn by Leo Gough at Amazon.co.uk
You can read more book reviews or buy The Con Men: A History of Financial Fraud and the Lessons You Can Learn by Leo Gough at Amazon.com.
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