It is no secret that Fraud runs rampant in markets around the world. Anyone who owns a phone, a computer, or even a mailbox has been the target of some form of scam. Some more subtle than others, these scams rob millions of people slowly of their hard-earned cash. Though most of these scams are small-scale cons, ranging from till skimming to plagiarism, they are just the tip of the iceberg.
Cons being pulled in corporate businesses usually evolve slowly over many years, so subtly that even their own internal reviews often miss them. They can go unnoticed for years, amassing millions, even billions of dollars.
Most people will not understand the inner workings of these companies well enough to identify when they’re being scammed. Instead, we often rely on professional investigators at the SEC, who are highly trained to spot and trace scams like these.
Unfortunately, the resources at their disposal do not meet their need, and too often, they rely on internal employees exposing the scheme. This puts a lot of responsibility on members of any organisation to pay close attention and report anything that seems at all suspicious.
Whistleblowers from within, external audits, even government raids will sooner or later break open even the most devious schemes. This presents an excellent reason to ensure you regularly review your budget, and perform strong internal audits. This applies whether you’re
a private investor or a corporation holding other people’s assets.
The real tragedy comes from the penalties and fines for such crimes, which generally come nowhere close to the amount stolen. In many cases, the billions of dollars brought in by these scams end up staying inside the company.
Penalties and restitutions rarely reach even a tenth of the amount taken from the victims. Even the largest class-action settlement paid out in history totaled barely a tenth of the amount stolen from millions of innocent people.
While these companies retain billions in stolen assets, their victims often walk away with only pennies on the dollar from what they lost. Some aren’t even that lucky. Entire life savings swindled away, and in return, they get a few hundred dollars. Many of the companies prosecuted for such massive fraud have names that countless people knew and trusted for years.
A long history of reliable service can be a promising sign, as can good customer reviews. Nothing guarantees safety. Knowing as much as you can about your investments can make all the difference in protecting your money.
Be smart, and know your investments. Know who you’re doing business with, and keep track of the company’s executive changeovers. These people are often in control of a lot of your money.