From Cautionary Tales: The Fraudster's Guide to Magic Money

The Dream

Little Everywhere

Health & Fitness, Business, Society & Culture

4.6 • 15.3K Ratings

🗓️ 26 April 2024

⏱️ 47 minutes

🔗️ Recording | iTunes | RSS

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Summary

Sam Israel had a problem. The investors in his hedge fund, Bayou Capital, were expecting spectacular returns. Sam himself had spent years proclaiming the fund's brilliant results. In reality, Sam had been marking his own homework, publishing fraudulent accounts and using these to lure in new investors.

What to do? Well, the logical thing of course: wait around for an extraordinary profitable streak, and in the meantime keep up the ruse...

We're bringing you an episode of Cautionary Tales with Tim Harford. This episode was recorded live at the Bristol Festival of Economics and studies three incredible investment scams. How do pyramid and ponzi schemes snowball out of control, flattening victim and fraudster alike?

For a full list of sources, see the show notes at timharford.com.

See omnystudio.com/listener for privacy information.

Transcript

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0:00.0	Pushkin.
0:07.0	It all started with two federal agents who heard a rumor.
0:15.0	She mentions, well, there is this alleged murder to have taken place.
0:21.0	There was.
0:23.0	They had no clue who the victim was.
0:26.0	We have to do our job, and we have to find out who did they kill.
0:32.0	It had been 15 years since this alleged murder. Was it still possible to unearth the truth?
0:44.0	I used to watch the unsolved mystery shows and I often thought about calling because I was like this is this is not right. How can the person
0:55.7	get killed and no one knows anything? I'm Jake Halpern and this is Deep Cover The Nameless Man.
1:05.0	Listen wherever you get your podcasts and if you want to hear the entire season right now,
1:09.6	ad free, subscribe to Pushkin Plus on our Apple podcast show page, or on Pushkin.
1:15.0	F.M. slash Plus. Do you know your Ponzi schemes from your pyramid schemes the following episode digs into the pitfalls of Get Rich Quick
1:35.1	Scams.
1:36.1	It was recorded in front of a live audience at the Bristol Festival of Economics. Economics. It's lovely see you here and please join me up with Tim Harper to his own. Gosh, wow, are you already?
2:07.0	Excellent.
2:09.0	Okay, so we will begin. Sophie and Julia were relaxing on the Riverside Terrace of a fancy London
2:27.3	Spa. Two rich girls joined by an even richer one, Tatiana, the glamorous wife of an investment banker.
2:36.7	Tatiana ordered another bottle of champagne
2:40.4	and launched into her sales pitch.
2:43.0	You simply must by a heart.
2:46.0	Julia and Sophie looked at each other and sighed.
2:50.0	This wasn't the first time they'd heard the spiel. It was the summer of 2003, and Hearts, with a capital H, were all the rage among the Champagne horse riding banker marrying ladies of Great Britain.
	...

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