Con Men, The

Financial Times
Leo Gough  
Total pages
August 2013
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Con Men, The
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Financial fraud, whether large or small is a persistent feature of the financial markets. If you scratch the surface of the investment world you’ll find a continuous stream of major financial scandals which are almost unbelievable in the sheer scale of their subterfuge. 


The Con Men shines a spotlight on some of these gargantuan frauds from the last 25 years. It questions how these men did it, why they did it, how there were able to get away with it, proposes strategies and tactics so that the reader can avoid being swindled.

Table of Contents


About the author



Part One A brief but efficient history of trickery


Chapter 1 The horror stories

   Bernie Madoff

   Allen Stanford

   Could you have spotted a problem?

      Lessons from the past

   If you can’t trust the analysts and the auditors, who can you trust?


Chapter 2 Our touching need for confidence

    Insider trading

   Ivan Boesky and Dennis Levine

   Robert Vesco

   Plus ça change. . .


Chapter 3 Shiny new inventions and old tricks

   Ponzi and ‘Pump and Dump’ schemes

    The SEC and Bernard Madoff

   Further SEC investigations

   Some frauds just never go away


Part Two Let’s go to work: the confidence men in action


Chapter 4 Sharks or maniacs?

   Are some financial fraudsters psychopaths?

   Routine activity theory

   Nigerian scams – a different type of fraudster altogether?

   The problem with plausibility


Chapter 5   Yielding to temptation: the Allen Stanford story

   Offshore jurisdictions

   Good old boys

Making sense of Stanford


Chapter 6 Shamanagement: financial wizardry to create paper profits

   The Olympus scandal

   The man who became the ‘Man from Del Monte’

   Investors versus business shamans


Part Three   Why we get the swindlers we deserve


Chapter 7 Some deadly sins of investment: trusting false prophets,

investing for the Apocalypse and the money illusion

   Selling the sizzle, not the steak

   Gold bugs: waiting for Armageddon

   The money illusion

   You can fool some of the people all of the time …


Chapter 8   Moral hazard in the system

   The LIBOR scandal

   The swindling of Jefferson County, Alabama

   Surviving the banks


Chapter 9 Due negligence: failing to do the analysis

   Harry Markopolos and Bernie Madoff

   A word on funds and funds of funds

   Due diligence always matters


Part Four How to avoid being swindled



Chapter 10   Funds are not all the same!   

The Bayou hedge fund fraud

   Avoiding hedge fund fraud


Chapter 11   All the books are cooked: the trouble with company accounts

   Legal differences

   Corporate governance from the investor’s point of view

   Company accounts

   Crazy Eddie


   Investors and accounts


Chapter 12   Safer strategies

      The first line of defence against fraud

      Lower your expectations

   Asset allocation

   Staying sane in the investment jungle



Further reading





Back Cover

“In today's regulatory environment, it's virtually impossible to violate the rules.”

 Bernard Madoff, 2008. Sentenced to 150 years in prison, June 2009 for running a $65 billion Ponzi scheme


“We don't break the law.”

Kenneth Lay, CEO of Enron, 2001. Died in 2006 while awaiting sentencing for fraud


"No one will find me to have knowingly committed fraud."

Bernard Ebbers, CEO of WorldCom, 2002. Sentenced to 25 years in prison, July 2005, for fraud


“I will die and go to hell if it is a Ponzi scheme. It’s no Ponzi scheme.”

R. Allen Stanford, CEO Stanford Financial Group, 2009. Sentenced to 110 years in prison for running a $7billion Ponzi scheme, June 2012



Financial fraud, whether large or small, is a persistent feature of the financial markets. If you scratch the surface of the investment world you’ll find a continuous stream of major financial scandals which are almost unbelievable in the sheer scale of their subterfuge. 


The Con Men is a wry look at some of the biggest names in the investment world and the frauds they have committed. Fast-paced and witty, it unpicks the financial scandals of the last few years and tells us what we need to know to protect our money in the face of greed, betrayals and lies. It offers up valuable lessons we can use to protect our investment, by answering the crucial questions:


·   Who are the fraudsters?

·   Why do frauds and mega-frauds happen?

·   Why are there more frauds during market booms?

·   Why can’t the regulators stop them?

·   How can I protect myself without overpaying for phoney protection?


Leo Gough was the editor of two investment newsletters during the 1990’s, ‘The Zurich Club’ and ‘Taipan’ for Fleet Street Publications. Since 1997 he has spent much of his time in the Asia/Pacific region, working with banks, such as Citibank, and consultancy firms, such as AT Kearney. Currently Leo is working in management consultancy in the Middle East. He is the author of more than 20 books on personal finance and investment.


Reader Review(s)

Leo Gough’s book ‘The Con Men’ is something that has needed to be written for a very long time. It gives a potted history of the major frauds that have been perpetrated on the investing public, who have lost masses of their hard earned capital, and who have no redress for the theft of their money.

Charles Vintcent, author of Investing for Recovery (FT Publishing, 2010)