3 ms·
What I'm hearing is "avoiding the ire of the SEC is relatively easy" because "Bernie Madoff." IMO that is naive. He is an outlier. Sort of like saying committi
by kahnjw 9y ago
What I'm hearing is "avoiding the ire of the SEC is relatively easy" because "Bernie Madoff."
IMO that is naive. He is an outlier. Sort of like saying committing mass acts of terrorism is easy because 911.
- c3534l 9y agoAlso, actual SEC filings. But fine, here's a paper: https://business.illinois.edu/accountancy/wp-content/uploads/sites/12/2014/11/Audit-2010-Dyck-Morse-Zingales.pdf https://business.illinois.edu/accountancy/wp-content/uploads... I can't find it now, but I do recall the SEC itself putting the number of frauds they uncovered in the low single digits. I might ask my SEC friend himself what percentage of the iceberg he thinks is uncovered.
- kahnjw 9y agoI have asked him this. Paraphrasing his words: eventually, the SEC investigates virtually all securities frauds. Some cases are dropped if the act was criminal in nature and the FBI or law enforcement wants it, other cases are dropped if the suspect is deceased or fled, and of course there are cases where leads go cold and the case is back burnered. The point is, fraud is risky, and it isn't easy. You basically have to be willing to give up your life as you know it. Sometimes I wonder whether fraudsters have an internal dialogue about whether it is worth the risk. And for the fraudsters who aren't psychopaths the guilt of defrauding friends and people who trust you must be enormous. Sounds like a stressful day job that I won't ever be entertaining.