High Finance Scandals

I have yet another shameful confession to make.

High Finance Scandals Messy MoneyI am fascinated by stock market scandals and calamities.  Do not get me wrong – I do feel bad for the people who suffer losses due to these events.  Sadly it is usually the employees and small investors that suffer most, but as the scandals are unfolding it can be hard to look away.

What I find very interesting is that some companies pulled off these great shams in full sight of the analysts, investors and regulators.  When the postmortem is performed it becomes painfully obvious that the signs and clues were there all along, but for whatever reason they were missed.

Just this week, a new calamity started to unfold.  An organization calling themselves The Trinity Research Group Released a 121-page report alleging that Chinese Company 21Vianet Group described as  “the largest carrier-neutral Internet data center services provider in China” is a Ponzi scheme (their words not mine).  The report can be found at the Trinity Research Group (site not reachable when checked September 2015 – Sorry!) website if you are interested in perusing it yourself and it is amusing.  The company denies the report and the story is still developing.  I will be watching it closely, and if the company is “false” I am going to bet that some of the analyst and investors will continue to stand behind it until it turns to dust.  Denial is a very powerful defence mechanism.

It raises the question though, do investors (and analysts and funds for that matter) know what they are investing in? Do they know who is running the company and what their track record is?  Do the financial statements and filings make sense?  Taking a quick look at the company filings and googling some of the key information can tell you a lot.  I wrote an article about researching penny stocks — a bit tongue in cheek — but there is some truth to it.  I have found some interesting, scratch your head information about companies just by doing a web search.  If you are investing in individual companies, you might want to try it just for fun.

Which brings me to some of my favorite reads about stock market shenanigans.  If you are interested in the dark side of high finance, like me – I promise you will enjoy them.​​ Some of them may be out of print, but used copies may be available or you can pick up a copy at your local library.

In no particular order and littered with Amazon affiliate links for your convenience:

High Finance Scandals

Anatomy of Greed: Telling the Unshredded Truth from Inside Enron

This book made me laugh out loud.  If you want to understand the experience of the front-line staff as the company they work for implodes around them,  Brian Cruver has done a great job of capturing it. Life inside the “crooked E” was truly a farce.

The Big Short: Inside the Doomsday Machine

Michael Lewis does a remarkable job of showing us the origins of the great financial crisis and the disease that was the sub prime mortgage market.  We cannot help but root for the underdogs that uncovered some of the irregularities, bet against it and waited for it to disintegrate and waited some more.  Absurdity at its finest.   If you enjoy this one, you might also like Liar’s Poker, a behind the scenes look at his time as a bond salesman. A great book for those that fantasize about a career in high finance.

Thieves of Bay Street: How Banks, Brokerages and the Wealthy Steal Billions from Canadians

Please take your blood pressure medication before you start reading this book and don’t say I didn’t warn you.  This one might make your blood boil.  Bruce Livesey covers a smorgasbord of scams, frauds, and people behaving badly.  Everything from Global Crossing to Nortel and the apparent lack of oversight and repercussions for those involved.

Lost and Found: One Woman’s Story of Losing Her Money and Finding Her Life

What if  one day all your money was gone?  It happened to Geneen Roth, a successful author and speaker and Bernie Madoff victim. What do you do when you learn ALL your savings are gone?  Go shopping.  This is a first hand of how the author was forced to come to terms with her relationship with money after losing it all. This book is written from a woman’s point of view and I believe it will appeal more to a female audience.

Happy Reading!  I wonder if there will be a book about 21Vianet added to this list one day?

brokeGIRLrich

25 Comments


  1. This post reminds me of Wolf of Wall Street and a tiny bit of Charlie Sheen’s Wall Street..Good post again !!

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    1. Thanks – a few people have mentioned the Wolf of Wall Street.
      I left you a message on your net worth page. Cheers!

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    1. I know – my blog reading list is growing too- reading time is precious. Thanks so much for the Nom! Now I need to narrow down my nominations.

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    1. It never fails to amaze me that these things can go on in this day and age (regulations, audits, filings etc.) but I guess some things never change.. greed.
      Appreciate you coming by and commenting.

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    1. They are very good (IMO) – hope you enjoy if you happen to pick up one of these titles. Thanks for stopping by.

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  2. Great selection of books and I’ve read the Thieves of Bay Street. I actually worked for a time for Global Crossing in Montreal as a teleconference agent in the late 1990’s but I didn’t stick around very long to see the bust up. I also know someone who was affected financially by the Nortel disaster.

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    1. Global Crossing – how interesting! Glad you were out before it fell apart. Nortel was really sad and think nobody expected it.

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    1. Thanks for coming by. 21Vianet was trading over $30 US in August. Dropped below $15 last week for a spell. Looks like it is coming back. It will be interesting to see what happens.

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  3. It is not strange that you are fascinated with these stories. There are a few books and movies about them. The problem is that most people don’t know where they invest their money. That is why you see many inflated stocks due to valuations based on rumors. People tend to get on the band wagon when the market is going up and ride it to the top. But they usually ride it to the crash. Story of Nick Leeson is great lesson for everyone.There is a movie and books to read about it. Thanks for the recommendations.
    Carla recently posted…My Favorite Car Jokes & InsuranceMy Profile

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    1. Oh the rogue trader! I have seen the movie but I need to check out the book. Thanks for the suggestion.

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    1. The are interesting and sometimes better to watch from afar. LOL Thanks for hosting #finsavsat and visiting.

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    1. That’s a lot of travel! The Big Short is great – Michael Lewis is a great writer and really pulls you into the story. Hope you enjoy it and safe travels!

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    1. LOL. Hope you enjoy them. Thanks for co-hosting #finsavsat today – I try not the miss it.

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    1. They are hard to put down. Glad I am not the only one interested in these calamities. Appreciate you coming by and commenting.

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