Don't Fall for It: A Short History of Financial Scams

by Ben Carlson

Learn financial and business lessons from some of the biggest frauds in history

Why does financial fraud persist? History is full of sensational financial frauds and scams. Enron was forced to declare bankruptcy after allegations of massive accounting fraud, wiping out $78 billion in stock market value. Bernie Madoff, the largest individual fraudster in history, built a $65 billion Ponzi scheme that ultimately resulted in his being sentenced to 150 years in prison. People from all walks of life have been scammed out of their money: French and British nobility looking to get rich quickly, farmers looking for a miracle cure for their health ailments, several professional athletes, and some of Hollywood's biggest stars. No one is immune from getting deceived when money is involved. Don't Fall For It is a fascinating look into some of the biggest financial frauds and scams ever.

This compelling book explores specific instances of financial fraud as well as some of the most successful charlatans and hucksters of all-time. Sharing lessons that apply to business, money management, and investing, author Ben Carlson answers questions such as: Why do even the most intelligent among us get taken advantage of in financial scams? What make fraudsters successful? Why is it often harder to stay rich than to get rich? Each chapter in examines different frauds, perpetrators, or victims of scams. These real-life stories include anecdotes about how these frauds were carried out and discussions of what can be learned from these events. This engaging book:

Explores the business and financial lessons drawn from some of history's biggest frauds Describes the conditions under which fraud tends to work best Explains how people can avoid being scammed out of their money Suggests practical steps to reduce financial fraud in the future Don't Fall For It: A Short History of Financial Scams is filled with engrossing real-life stories and valuable insights, written for finance professionals, investors, and general interest readers alike.

Genres: Finance, Business, Nonfiction, Audiobook, History, Economics, Money

192 pages, Hardcover

Published February 26, 2020

About the author

Ben Carson is the Director of Institutional Asset Management at Ritholtz Wealth Management. The firm creates detailed investment plans and manage portfolios for institutions and individuals to help them achieve their goals.

Reviews

[Tamsyn · Rating 1 out of 5]

Needs editing badly

[Bill · Rating 3 out of 5]

Ritholtz Wealth Management seems to place a lot of emphasis on content creation. Their team members produce blogs, newspaper columns, podcasts and increasingly books. Here's another one, and it was ok. It's a fast read. Like every book on the subject mentions the Mississippi Company and the South Sea Bubble. It contains all the obligatory quotes like Newton's "I can calculate the motions of heavenly bodies, but not the madness of people" and Buffett "when the tide goes out you can see who was swimming naked." Carlson touches on Ponzi, Madoff... Not the deepest analysis, nor the best writing. But nothing objectionable. A good start on the subject.

[Alex · Rating 3 out of 5]

"Don't Fall for It" takes the reader on a breezy walk through the major financial scams of the last 150 years or so. It's thesis? Two parts: if it's too good to be true, it almost certainly is; and it's harder to keep money than make money.

Ok, fine. I knew this going in, and it was a good refresher. However, I felt that the writing lacked a degree of pop. The more famous fraudsters have been characters of great charisma, yet I the book never gave me much more of a sense of that than, "They were charismatic." And how does a short history of financial scams published only five years ago, overlook the vast fortunes being raked in by online scammers every day?

Still, and unlike many of the scammers this book profiles, "Don't Fall for It" delivers on its promises. The reader will grow acquainted with fraud's "greatest hits." The reader will learn something. Hopefully, the next time the reader is approached with a can't-miss investment scheme, the reader won't fall for it.

OBTW, I encourage readers interested in this subject to visit the Reddit thread r/Scams. There, they'll learn all about the most prevalent of today's scams -- unfortunately, mostly from people saying that they've lost their money and wondering what to do next. A few minutes perusing that subreddit will open your eyes.

[Luis Campos · Rating 5 out of 5]

Save yourself thousands of pages of how to manage your money and read this book instead. By observing how people are tricked in handing their money away, you come to realise that people *want* to be tricked. So the con-artist is just one side of an explosive combination: greed and ignorance. And believe me: it's when you think you got it under control, that you enter the golden zone of ignorance. One historical example after the other: the railway bubble, International Match Company, etc. Throughout this book you will find yourself having to reflect more about both sides of the above recipe for disaster and you'll learn how to control your greed. Also how to be more humble about what you know in the world of finance and money.
I highly recommend this book to everyone: from the most naïve to the most knowledgeable person in managing its own money.

[Ravshan Toirov · Rating 4 out of 5]

Nice and interesting stories.

[Zachary Petersen · Rating 2 out of 5]

I'm a really big fan of Ben's podcast, Animal Spirits. With that being said this book seems to be targeted at a totally different, more casual, audience.

On the positive side of things, the stories in this book are all really fun and engaging. Hearing about how a guy sold the Eiffel Tower twice is pretty funny and an interesting story. Same with hearing about the Mississippi and South Sea Companies.

The problem though, is the book then takes these stories and spits out some platitudes about how we should avoid scams and not fall for things that are too good to be true. While the advice is accurate, it's extremely surface level and not very helpful. It also comes across as extremely basic advice. The other issue I have is that the stories jump around soooooo much. I get that it's probably difficult to relate a lot of these scams, but it's almost like a stream of consciousness put onto paper.

Overall, if you're just looking for a fun, short read, then this is a great fit. However, if you're looking for something more substantive about finance, there are probably better options.

[Hunter Satterfield · Rating 3 out of 5]

This is a good (not great), short book with some informative stories on some of the worst scammers, hucksters, and charlatans over the years. The stories are interesting, but pretty simple overall as the book acts more like chapters of blog posts vs. a traditional book.

Carlson is one of my favorite investment writers because he tends to do just that. Short and to the point. The only thing that makes this a good and not great book is some of the chapters feel disjointed. It is still a fun read and great for quick sit reading as each chapter is 6-10 pages long.

The most helpful part of the book is the last chapter/epilogue where Carlson identifies six ways to identify a scammer. All six are excellent pieces of advice to avoid scams, but also great for any investment opportunity you are reviewing.

[Jerome Kuseh · Rating 3 out of 5]

An informative review of some of the most famous financial scams in history. This book stresses the importance of being a cautious investor and not overestimating your ability to avoid scams. The only drawbacks are the fact that these stories (and the subject matter) are not too novel. The lessons from these scams could be better expanded although it's a sacrifice worth making in order to keep the book short and engaging. 3.5 stars.

[Aly M · Rating 5 out of 5]

I never thought I would say this, but this was actually a fun read. The chapters are very manageable but also highly informative, lots of entertaining modern references, and now I know that at one point in history men were desperate enough to sew goat testicles into their scrotums for increased virility.

[Jay Slayton-Joslin · Rating 3 out of 5]

It is what it says on the tin. Kind of feels like a culmination of Wikipedia articles and a bit of light extra reading.

Pretty handy to give people a general knowledge. I learned a few things and there's the more commonly known stuff like Ponzi and Madeoff.

Fine for free but not a deep dive or anything outstanding.

[Spence Byer · Rating 5 out of 5]

Fun/fast read. Carlson throws countless fascinating stories throughout. While the lessons here should be already engrained in investment professionals, this would be a perfect book for RIAs to give to HNW clients as a primer if said clients considering making private investments.

[Sumit Sabnis · Rating 5 out of 5]

Absolute fun ! Quick , highly entertaining read.

I like the definition of Type 1 and Type 2 fraudsters as defined by the author.
I think Vijay Mallya was the Type 1 who was a visionary but lacked accounting discipline or any discipline and Nirav Modi was a type 2 was at the outset a crook.

[Darren Sapp · Rating 3 out of 5]

Carlson provides a thorough walk-thru of financial schemes but it sort of reads like a Wikipedia article. I would have like to have seen more focus on eight or ten basic examples with more human interest of both hucksters and victims.

[Gene Neyer · Rating 2 out of 5]

The compilation of manias and frauds. All of these are well known classics that had been described multiple times in other books. And the new frauds and manias are not covered at all. So, no new ground covered, no new insight offered.

[Wendy · Rating 4 out of 5]

Nice, timely reminder about avoiding scams as well as one's own self-injurious behaviors. Entertaining and informative -- a good combination!

[Haidong · Rating 3 out of 5]

Good read about history of financial fraud/scams, good lessons for any age

[Joshua · Rating 3 out of 5]

Interesting but lacking

I like the stories. But the advice was seemingly lacking. Seem to be super brief. I wanted a little more meat.

[Brian Ferry · Rating 5 out of 5]

Witty, informative, and easy to read. Provides a few valuable investment principles.

[Rachel · Rating 4 out of 5]

Very interesting book and fun to read. I think the organization of the chapters could be better.

[Rowdy · Rating 3 out of 5]

Nice, medium paced book of good to know things and financial fraud history. And yes I would still be fooled if the scheme sounds to good to be true, it just got a little harder for the conmen.

[Paweł Rusin · Rating 4 out of 5]

A lot of cool financial anecdotes and well researched.

[C · Rating 4 out of 5]

Full of warnings and advice to prevent me from losing my money.

[Philip Cunningham III · Rating 4 out of 5]

I'm a fan of Ben's podcast with Michael Batnick. Some classic stories of people making financial mistakes, some stories of how swindlers took advantage of their victims, and some good tips to avoid all of the above!

Free to listen to if you're an Audible subscriber