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.

Praise and Reviews

“David Sarna has written an important, readable, erudite and compelling book that delves into all of the dark corners of the financial markets in a way that only one who is a knowledgeable  intellectual like David, and who has seen, as David has, the inner-workings of the markets  can do”

Andrew Malick, Chairman, Needham & Co.

“David Sarna has provided a close-up, insider’s view of some of the shenanigans going on in and around the financial capitals of the world. It is very readable, entertaining and almost funny until you realize all the lives that have been hurt by the combination of at best amoral and more correctly criminal acts aimed at investors of all stripes who foolishly expected and chased outsized returns. Sarna describes, all this against a backdrop of regulatory complacency, bonuses and salaries for the Titans of finance and industry who added little of anything to the quality of life for those who did not ride the gravy train with them.”

Jonathan Harris, CPA, Retired Senior Partner, “Big Four” Accounting Firm

“David Sarna is a visionary technologist. He is also a sophisticated investor and financier.He has written a readable, comprehensive, fascinating and well-researched book that explores troublesome aspects of the financial system in a way only an experienced insider could.”

Jay N. Goldberg, Senior Managing Director, Hudson Ventures

“A comprehensive review of what has happened to us in our financial markets over and over and over and over again.  It’s an important history, written with wit and delivered with wisdom.  Undoubtedly, History of Greed will become required reading by anyone serious about understanding the capital markets.”

Frederick L. Gorsetman, Founder and Managing Member, Oxbridge Financial Group LLC

"Fascinating!  I did not think the trading of securities and reading about it could be that absorbing."

Carl Nisser, Swedish attorney who has worked with securities issues in Brussels, Jakarta, London, New York and Stockholm, member of the Legal and Tax Committee of a European stock exchange, and former Junior Judge at Svea Court of Appeal, Stockholm.

“History of Greed  is right on the money and quite timely. I found a lot of information, much I did not know, and I have been around the industry for a while. It made me feel like a dunce once I saw how the manipulative trading on the OTC stock market really works.”

Philip Fox, Insurance Executive and former Broker

Related Links

• History of Greed Book Website
• GreedWatcher® Blog