The stories this week out of Wall Street and Toronto about Bernard Madoff and Marc Dreier touch close to the heart of business. Wealthy, successful, incredibly intelligent people -- purportedly playing by the rules -- have been arrested and charged with serious criminal fraud offences and (formerly) wealthy investors in their schemes face extreme hardship and perhaps destitution.
What causes people with purportedly excellent reputations to turn out 'bad' (the individuals named here of course are considered innocent until proven guilty in a court of law), and why do people with wealth, intelligence, and capability fall for what are, in effect, scams?
I wish I had an answer, but expect we will find more stories of this sort as the economic recession deepens and problems patched up in an environment of growing wealth are exposed in declining markets. And some of these stories will touch closer than we like to the AEC community. (Note: I have no evidence or even a hint of wrongdoing anywhere within our community, so the previous remark is speculation, not fact.)
Some people are corrupt all along, putting up a show of integrity where, underneath the surface, they are true psychopaths. Others slip gently at first over the line, then fall deeper and deeper into the morass of crime. (And unless you are Mother Teressa, I suspect you've crossed the line at least a few times in your life, only to recover and return to respectability -- just avoiding the one step too far, where your integrity is compromised by the ongoing reality of your circumstances. Yes, you can interpret the previous remark autobiographically, but don't expect me to be totally clear about my transgressions in this public forum.)
Can you avoid being a victim of fraud? And can you decide where the point of stretching the truth just a little, goes beyond fair play and into the realm of dishonour? I won't give a perfect answer here, but offer some thoughts which you will observe are founded in common sense and Jewish values.
If it is too good to be true, it usually (but not always) is.
Beware of gifts from strangers (and exceptional gifts from friends) and beware of short term gain with long-term pain. If someone promises and seems to deliver amazingly good results, stand back and ask if the story is real. Sometimes of course really good stuff happens. Enjoy it.
Trappings are not substance.
Look at where things really are. I know you expect an investment advisor or bank to have a high class establishment, but when you are doing business with real business people, they will often operate in much more modest circumstances.
Know your stuff, and know how to assess people who know stuff you don't know.
That is quite a phrase, but you have a responsibility to not assume anything. I am not a medical doctor, for example, but certainly can research the norms of good health and potential problems -- and also assess whether the doctor is a good at diagnosing.
Put all your eggs in one basket, then remove some of them.
What I mean here is that you need to become great at your chosen field - your objective is to be truly at the peak of your profession, business, or craft -- but you then need to take a few 'eggs' out of that for your investments, and spread them around a little. This way, if something goes wrong in your primary space, you will feel hardship, but not destitution. You will live for another day.
I believe most people are good, most of the time. Most of us live within values of integrity, fair play, and humanity and respect, and share these values with our families, friends, and business associates. A few people are really bad, and a few people are perfect -- I'm neither. You may still be victims of crooks, even if you adapt the ideas expressed here, but I think your chances of victimization and (worse) destitution are much lower if you use some common sense and remember the basics.
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