There is a famous scam called "lightning rod sales", which takes advantage of the legal loophole of this "legal holder". This scam is like this: every summer thunderstorm season, a group of lightning rod salesmen go to various villages to publicize the great risk of lightning-induced fires to villagers. Once you show a little panic, they will tell you immediately that they are willing to install lightning rods for your home at a great discount, because the company has just started this business, and your home is in a particularly good position, which is a good landmark building for promoting and displaying products. And you don't have to pay first, and then pay when you are satisfied after the installation and acceptance.
Does that sound all right? Next, the pit came. They will sign a sales contract with you, the installation fee is very cheap, and they will sell it to you on credit; But you won't notice that there is a particularly inconspicuous additional clause in the contract, that is, you must buy a particularly expensive insurance for the lightning rod. When you signed a contract and installed a lightning rod, you also owed a lot of money. Lightning rod company immediately transferred the debt to a third-party brokerage company at a low price, which is the so-called "legal holder". You must repay the debt to the "legal holder" and you can't cancel the transaction on the grounds of contract fraud.
The fraudulent behavior of profiteers in the civil war made States realize the importance of quality inspection again and restarted the compulsory inspection system one after another. So, how to solve the problems in the previous inspection? In order to solve the problem of subjectivity and arbitrariness in inspection, Illinois established an inspector guidance school to train qualified inspectors and standardize the inspection process. At the same time, technical experts are hired to test the composition and purity of the products by using the latest chemical knowledge.
These measures have greatly improved the reliability and credibility of inspection, and the compulsory inspection system has spread rapidly, widely used in fertilizers, pesticides, dairy products, alcohol and other commodities. In particular, in 1906, the United States Congress promulgated the Pure Food and Drug Act, which set the national quality inspection standards and further tightened the regulatory requirements. 19 16, the us congress promulgated the food standards act, which stipulated that food inspectors must pass the examination and take up their posts with certificates, and their licenses will be revoked if they fail the examination. The author believes that the promulgation of this series of laws and regulations means that the modern administrative management system in the United States has begun to be established.
Sears said. In fact, it is not wronged to be issued a fraud order. At that time, Sears' marketing strategy was not much different from those fraudulent companies. Its e-mail advertisements are full of false marketing and induced purchases, such as winning big prizes by buying things. Perhaps, under the competitive conditions at that time, if Sears didn't adopt this extremely exaggerated propaganda method, he couldn't attract the attention of consumers and he couldn't live.
Fortunately, after receiving the fraud order, Sears had a good attitude, quickly admitted his mistake and immediately rectified it, so the post office withdrew the fraud order. Since then, Sears never dared to think about false marketing, but tried to attract repeat customers by optimizing the supply chain with high quality and low price. Sears also took the lead in introducing the "no reason to return" policy, so that consumers can buy with confidence. In this way, Sears developed from a "liar company" sentenced to death by the post office to one of the largest retail companies in the United States in the 20th century.
When it comes to investment fraud, you may immediately think of a word, Ponzi scheme. Yes, this famous scam took place in the United States on 1920. Ponzi scheme was not invented by a businessman Ponzi. He is the man who made this ancient project the biggest in the 20th century, so he got the naming right. The fixed routine of Ponzi scheme is to pay high interest to investors regularly to attract more and more people to invest. In fact, it is to pay the interest of the former group with the money of the latter group.
Two forms of investment fraud are waiting for you.
One is called "driving up prices and selling on rallies", which is also an ancient form of investment fraud. For example, in the famous17th century in tulip bubble, the Netherlands, when tulips were first introduced to the Netherlands, local speculators hoarded a batch of tulip bulbs, and then speculated on the price of tulips to trick investors who didn't know the truth into taking over, and speculators sold them at high prices. This kind of investment fraud has been repeated for hundreds of years. In the stock market, the banker pushes up the stock price and then sells it on rallies, which is also the same operation method.
In the book, the author tells a clever scam that happened in19th century, which is a variation of this operation method and is very interesting. At that time, many mining enterprises in California were listed on the stock exchange, and once new rich mines were discovered, their share prices would soar. Therefore, whenever workers find clues about rich mines, the management will urgently close the mines to prevent the news from leaking, and then buy a lot of company shares at low prices, waiting for the price to rise. Over time, investors have also discovered this law. Once the mine is closed, it means that it may find rich mines, so it quickly follows up and buys stocks.
1872 there was a mining enterprise, which didn't find any rich ore at all, and closed the mountain under false pretence. As a result, it attracted the attention of investors and the stock price went up all the way. The managers of this mining enterprise took the opportunity to sell their shares at a high price. Later, the truth came out, the company's share price plummeted and investors suffered heavy losses. Since then, several similar investment fraud cases have occurred. Only then did the California government make up its mind to rectify listed mining companies and require them to disclose information to shareholders regularly in accordance with unified accounting standards to protect shareholders' rights and interests.
It was also in the1870s that the third form of investment fraud appeared, that is, management fraud. At that time, the management of several life insurance companies in new york forged insurance policies to cover up the deteriorating financial situation and paid themselves generous salaries. This kind of fraud is also very common in later listed companies, such as WorldCom and Enron financial fraud cases that broke out around 2000. 188 1 After several fake life insurance companies closed down, New York State introduced a strict supervision system for insurance companies.
The author believes that California's supervision of mining companies and New York's supervision of insurance companies indicate that the US government has begun to establish a supervision mechanism for the securities market and financial industry. However, from today's perspective, financial supervision at that time was still quite loose, and it was difficult to put an end to investment fraud. Many people believe that the financial collapse of 1929 is rooted in unscrupulous insider trading and stock market manipulation on Wall Street.
So 1933 After President Roosevelt took office, the first thing to do was to set up a hearing to thoroughly investigate Wall Street. President Roosevelt signed the glass-steagall act, the most stringent financial supervision bill in American history, and also promoted the establishment of the American Securities and Exchange Commission, that is, the American Securities and Exchange Commission. President Roosevelt further suggested that a new rule be added to the old principle of "the buyer should be cautious", called "the seller is at his own risk". Financial sellers who have mastered the advantages of information must bear legal responsibility for their products.
The author believes that the principle of "the seller is conceited" marks the turn of American political discourse. From then to the 1970s, people no longer believed in the laissez-faire economic environment, but called for greater government power and stricter regulatory policies to maintain market order and fair trade.
The 200-year history of American commercial fraud is reviewed. /kloc-The U.S. government in the 0/9th century was a typical small government, with little supervision over the commercial sector. Consumers can only be self-reliant and "beware of buyers". If you are cheated, you can only admit that you are unlucky. It was not until the late Civil War that the US Congress enacted the first anti-fraud bill in order to crack down on profiteers who supplied munitions.
Since then, the U.S. government has successively introduced the compulsory commodity inspection system, the anti-mail fraud system and the Pure Food and Drug Act. , further standardizing the commercial behavior in the field of consumption. After the Great Depression, President Roosevelt vigorously strengthened the supervision of the financial industry and promulgated the most stringent financial supervision bill in history, emphasizing that financial practitioners must be "sellers are responsible."
However, the last chapter of this book is entitled "Market Counterattack". The author believes that since the late 1970s, with the rise of neo-liberalism, the government has relaxed its supervision in order to stimulate the economy. As a result, large-scale fraud has come back, such as WorldCom, Enron fraud mentioned above, and Madoff fraud. After the financial crisis in 2008, the American people repeatedly called for strengthening financial supervision, but they were strongly resisted. It seems that the game between fraud and anti-fraud, supervision and anti-supervision in American business history will continue.