Why scammers and scammers still enjoy the trust of the public

(BFM Bourse)-From Enron to Wirecard via Let’s Gowex, financial fraud continues to each other, and deceived investors can only cry. Most notable is not the skill of the scammers, but the embarrassing self-confidence they have …

The first (documented) financial fraud in history preceded the Christian era for centuries, with a Greek merchant named Hegestratos pre-sale of undelivered wheat cargo in his pocket. Put in, resell with his account, and the sinking of his ship (being involved in the act, the applicant drowned). Since then, scandals have continued to destroy history, from the Panama Canal incident to Charles Ponzi’s rat lecture, or to our close Enron, WorldCom, Gowex, Serranos and, more recently, the flagship of the so-called German payment service. increase. Wire card.

But every time the deception is revealed, the deceived actors are surprised that the case is sewn with white thread. An investor who is too human and too human is at the expense of his basic need to trust others and his fascination with the story told to him …

In a book published this week by the Bantam version of “Money Men” (untranslated), Dan McCrum Financial Times And it ended with the collapse of the incredible card house that was a wirecard after many years of denial by the German authorities. The amazing success of this German new technology flagship was based solely on huge fraud. Nonetheless, the benefits were only present to most customers, as many whistleblowers have hinted over the years.

Lack of means to check alone

This a priori incredible scammer enjoys while Dan McClam gives a breathtaking account of his investigation, the threats and intimidations he had to face. I also wonder about trust. The history of turkeys in the farce is constantly repeated every time they can’t believe they are so naive. Why do we trust scammers?

In an article from Financial Times, Our colleagues raise some determinants. On the one hand, skeptics such as shortsellers (the only ones who have a serious interest in unmasking fraud) basically perform very mediocre investigative work. From the first contradiction, the first lie, it is enough to pull the ball, and in general, the criminal element accumulates quickly. But when it comes to investing, most people don’t try to confirm the facts. We say that the activities presented by default are genuine, based on the fact that there are institutions and processes in place to protect us from malicious agents when interacting with other economic agents. Invest on the assumption. Investors alone have no way of ascertaining the reality of accounts receivable from each company, just as consumers do not try to contact breeders of cattle herds who hand over milk packs to supermarkets and the like. The securities he plans to buy.

But with Wirecard, the signal has been there for years. “Your last digit [résultats financiers] The publication is great. It’s strange what’s happening to you. People should look at your business and say “wow”. At a telephone conference after Wirecard announced in March 2020, then star manager Alexander Derwall said that FT supported most of its earnings and profits in October 2019 as fictitious. The fake client’s name was stuffed into an internal document to do so. Three months later, Wirecard stopped trading forever, but professional managers could refuse to see the reality for a long time, right? Is it?

When you invest in something successful, you will unknowingly want to see it in the best possible light, and you will gross the wrong details, Martina Dub, “Scam,” Psychology of Persuasion and Fraud Techniques: Understanding What Makes Us Vulnerable “(Routledge, Untranslated), Financial Times..

Reality too difficult to accept

For many years of investors, doubting a position is very difficult, especially it is very beneficial. Alexander Wall began betting on wirecards in 2007 at a price of around € 9, and prices have risen more than 10 times. He could have been at the top (in 2018), but questioning the reality of wirecards seemed to question his own abilities, so he remained in decline. .. Eventually he lost everything …

The attitude of the German authorities has been particularly criticized, and of course. BaFin has launched three surveys of Wirecard critics (condemning shortsellers in 2008 and again in 2017 and 2019). Financial market regulators had two options. Foreign speculators and journalists Financial Times, Or a group belonging to the national flagship index, could lie boldly to institutional investors, banks and investigators. The reality was so shocking that I couldn’t think of it.

Guillaume Bayre-© 2022BFMBourse