History of Greed: Financial Fraud from Tulip Mania to Bernie Madoff
400 years of financial fraud in the making
From the earliest financial scams of the seventeenthcentury, through the headlinegrabbing Wall Street scandals of our times, Historyof Greed provides a comprehensive history of financial fraud. In it, DavidE. Y. Sarna exposes the true and often riveting stories of how both naïve andsophisticated investors alike were fooled by unscrupulous entrepreneurs,lawyers, hedge fund managers, CPAs, Texas billionaires, political fundraisers,music managers, financial advisers, and even former Mossad agents. From thepeople behind the financial fraud and how they did it to why people continuallyfall prey to scam artists, Sarna outlines what actions you can take today toprotect yourself from becoming the victim of tomorrow’s “too good to be true” investmentopportunity. History of Greed details how markets are manipulated, booksare cooked, Ponzi schemes are hatched, and how the government only closes thebarn door once the cows have all escaped.
The “greater fool” theory of economics states that it’spossible to make money by buying paper (securities), whether overvalued or not,and later, selling it at a profit because there will always be an even greaterfool willing to pay the higher price. Many described in this book profited bypeddling such worthless junk to foolish investors. But for some people—BernieMadoff, Norman Hsu, Sholam Weiss, and “Crazie Eddie” Antar, aka the “DarthVader of Capitalism”—overvalued securities were not enough. Outright fraud wastheir way of life. History of Greed is the compelling inside story ofthe names you know—Charles Ponzi, Baron Rothschild, Lou Pearlman—and the namesyou don’t—Isaac Le Maire, the world’s first “naked” short-seller. It’s also ourstory—why we ignore the lessons of the past and fall prey, most every time, to thepromise of easy money.
For thousands of years, alchemists unsuccessfully tried toturn worthless base metals into gold. Where science failed at turning nothinginto something, business succeeded. Sometimes we praise the creators ofderivatives, collateral debt obligations, subprime mortgages, credit defaultswaps, or auction rate securities as Wall Street’s new financial wizards, thecreators of “magic paper.” Other times, we vilify and prosecute them as scamartists. Sometimes, it’s hard to tell who is who. History of Greed revealsthe inside secrets of how the markets really work, and how scam artists abusethem to gain an unfair edge or to outright steal. It describes how luftgescheft(“air business”), wizardry, dishonesty, and fraud are used to swindle people.Along with a comprehensive bibliography, History of Greed also details:
• 400 years of financial fraud—from everyday fraud to theodd and unusual
• Accounting fraud (phantom sales), stock option fraud(backdating), auction rate securities, hedge fund fraud, Ponzi schemes,promotion fraud (pump-and-dump scams), and money laundering
• How to detect fraudulent schemes
• How government regulation only fixes yesterday’s problems
If it’s too good to be true, it probably is. If they say youcan’t lose, you probably will. History of Greed shows that there reallyis no such thing as a free lunch, while also detailing how not to become the “greaterfool.”
The Story Behind This Book
History of Greed provides a comprehensive history of financial fraud. In it, David E. Y. Sarna exposes the true and often riveting stories of how both naïve and sophisticated investors alike were fooled by unscrupulous entrepreneurs, lawyers, hedge fund managers, CPAs, Texas billionaires, political fundraisers, music managers, financial advisers, and even former Mossad agents. From the people behind the financial fraud and how they did it to why people continually fall prey to scam artists, Sarna outlines what actions you can take today to protect yourself from becoming the victim of tomorrow’s “too good to be true” investment opportunity. History of Greed details how markets are manipulated, books are cooked, Ponzi schemes are hatched, and how the government only closes the barn door once the cows have all escaped.