Sunday 23 July 2017

Tawdry tale of fraud offers lessons

'History of Greed' by David Sarna
Publisher John Wiley & Son
€24

A 'History of Greed - Financial Fraud from Tulip Mania to Bernie Madoff' by influential American businessman David Sarna is a catalogue of dishonest schemes and devices which have been used to cheat investors over the past four centuries.

It is sure to make any reader gasp at the sheer inventiveness and persistence of the world's fraudsters.

The title is a little misleading because Sarna, who has founded three companies himself and taken two public, limits himself to downright fraud rather than greed.

This is a shame for Irish readers who are probably very interested in any tips on how to distinguish between intentional fraud and good old-fashioned greed.

Much of the book is little more than a repetition of stories about well-known fraudsters such as Bernie Madoff, Charles Ponzi or 'Crazy Eddie' Antar who is also known as the Darth Vader of Capitalism.

Scams

The eye-opener for this reviewer was the sheer number of scams by ordinary stockbrokers, accountants, bankers and lawyers.

While we have had a fair number of scammers from these professions on this side of the Atlantic, the Garda's reluctance to prosecute white- collar criminals and the laws of libel, which prevent discussion of most white-collar crime, mean that most crimes by financial advisers here go under the radar.

Any reader of this book will probably never fully trust their advisers again which may well be no bad thing.

The most useful chapters in the 'History of Greed' are the ones on detecting fraudulent financial schemes and one on accounting frauds with several examples.

The lessons from these chapters are universal and the style is accessible.

Unfortunately, this is not a particularly well-written book and it is aimed at the US market so many readers will undoubtedly find their attention wandering from time to time. Despite these not insignificant drawbacks, there is something compelling in the repeated stories of significant breaches of trust.

Money

Money makes all of us do stupid things and it makes many people do crooked things as well.

Readers of a 'History of Greed' will be left with a strong belief that they have been defrauded by our politicians and bankers and an uneasy feeling that the friendly accountant, bookkeeper or family stockbroker may also be on the take.

Of course, everybody knows this could be the case but we often forget that fraud is far more widespread than most of us would like to believe and the old saying that one should 'trust but verify' remains a useful yardstick in the 21st century.

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