How to Smell a Rat The Five Signs of Financial Fraud

by Fisher, Kenneth L.; Hoffmans, Lara W.

• ISBN13: 9780470631966
• ISBN10: 0470631961
• Edition: 1st
• Format: Paperback
• Copyright: 2010-10-05
• Publisher: Wiley

Summary

In December 2008, a well-regarded member of the finance community, former NASDAQ chairman, huge charitable contributor, and pillar of New York society admitted to his sons the $65 billion he managed for hedge funds, charities, foundations, Hollywood stars, and myriad smaller investors was a fraud - a Ponzi scheme. 2008 and 2009 will be remembered for bear markets, a global credit crunch, and some of the largest investment scams ever. But these scams are nothing new - from Charles Ponzi to Robert Vesco to Bernard Madoff - they've been repeated throughout history, and there will certainly be more to come in the future. But the good news is fraudsters often follow the same basic playbook. Learn the playbook - and know how to ask the right questions - and financial fraud can be easy to detect and simple to avoid. Some advisers start intending to embezzle. Others evolve to it as Madoff claims. Either way, it's structurally the same, and you can learn ways to identify both intended and possible future fraud. Throughout your investing life, you may be presented with opportunities that seem too good to be true. In How to Smell a Rat: The Five Signs of Financial Fraud, trusted financial expert Ken Fisher provides you with an insider's view on how to spot potential financial disasters before you commit your money to a scam. Filled with in-depth insights and practical advice, this reliable resource takes an engaging look at recent and historic examples of fraudsters, how they operated, and how they could have been easily avoided. Fisher then shows you quick, identifiable features of potential financial frauds and arms you with questions to ask when assessing money managers. With this newfound knowledge, you can learn to spot red flags, such as: Advisers with direct access to investors' funds Firms with numbers that seem too good to be true? Managers with fees that are too low? Madoff didn't charge any fees, he just charged for trading! There should be a premium for integrity. Asking the right questions and performing the proper due diligence go a long way toward finding a firm that insulates you from financial fraud. With the help of trusted financial expert and bestselling author Ken Fisher, you'll be better prepared to identify and avoid financial scams that could instantly destroy the wealth you've worked so hard to build.

Author Biography

Ken Fisher is best known for his prestigious Portfolio Strategy column in Forbes magazine, where his twenty-five-year tenure of high-profile calls makes him the fourth longest-running columnist in Forbes's ninety-plus-year history. Ken is the founder, Chairman, and CEO of Fisher Investments, an independent global money management firm. He is on Investment Advisor magazine's prestigious IA-25 list of the industry's most influential people; is the award-winning author of numerous scholarly articles; and has published five previous books, including the New York Times bestsellers The Only Three Questions That Count and The Ten Roads to Riches, also published by Wiley. Lara Hoffmans is a content manager at Fisher Investments, a contributing editor to Fisher Investments MarketMinder, and coauthor of the bestsellers The Only Three Questions That Count and The Ten Roads to Riches.

Table of Contents

Acknowledgments	p. vii
Introduction	p. 1
Good Fences Make Good Neighbors	p. 11
Too Good to Be True Usually Is	p. 39
Don't Be Blinded by Flashy Tactics	p. 63
Exclusivity, Marble, and Other Things That Don't Matter	p. 87
Due Diligence Is Your job, No One Else's	p. 111
A Financial Fraud-Free Future	p. 137
Asset Allocation-Risk & Reward	p. 153
Same But Different-Accounting Fraud	p. 157
Minds That Made the Market	p. 161
Notes	p. 195
Index	p. 203
About the Authors	p. 209
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