Wednesday, June 22, 2022

Quote of the Day (Dan McCrum, on the Lack of Due Diligence Behind Financial Fraud)

Trust means not wasting time on pointless checks. Most deceptions would generally have been caught early on by basic due diligence…[But] it makes as much sense for a banker to visit every outpost of a company requiring a loan as it would for the buyer of a pint of milk to inquire after the health of the cow. For instance, by the time John Paulson, one of the world's most famous hedge fund managers, became the largest shareholder in Canadian-listed Sino Forest, its shares had traded for 15 years. Until the group's 2011 collapse, few thought of travelling to China to see if its woodlands were there.”— Business and financial journalist Dan McCrum, “Why We Trust Fraudsters,” The Financial Times, June 18-19, 2022

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