Do Some Victims Share Blame in Financial Fraud?
Not everyone believes that rogue brokers alone are guilty in financial malfeasance — their victims may hold some blame as well, one commentator asserts in MD Magazine.
Clients’ own greed, lack of financial sophistication and “brain alterations in older individuals” all contribute to victimization, Shirley Mueller, a physician turned financial consultant and educator, writes in the medical industry publication.
Mueller cites Scott Cohn, a special correspondent on the CNBC show “American Greed,” talking about Timothy Durham, an Indiana businessman serving a 50-year sentence for running a $200 million Ponzi scheme in an investment firm he took over in 2002. According to Cohn, “Durham had plenty of help from his own victims,” who ignored common sense in their pursuit of higher returns, Mueller writes in MD Magazine.
As for financial literacy, Mueller cites a University of Minnesota and Chicago Booth School of Business study that concluded that 7% of advisors currently working have had some sort of disciplinary action between 2005 and 2015. The authors of that study found that the counties where most of the broker misconduct occurred were areas of low education levels — combined with relatively higher incomes, Mueller writes.
She adds that diminishing capacity in seniors is another contributing factor, leading to poor decisions and the “tendency to more easily engage in investments scams.”
Fortunately, Mueller writes, the financial industry is taking steps to protect seniors already, and illiteracy can be cured through financial education – if consumers are willing. But there’s not much to be done about greed, she writes – it “is ingrained in the very fiber of human nature and not easy to reverse,” she writes in MD Magazine.