Oct 01, 2009

Ponzi Schemes- Shouldn't Investors Share the Blame?

Orange County (CA) insurance salesman James Halstead and his lawyer partner-in-crime Jeanne Rowzee have pleaded guilty to running a Ponzi scheme that bilked investors out of millions of dollars. (Thanks so much Rowzee for adding to the legal profession's already-tarnished image.)  http://www.latimes.com/business/la-fi-halstead29-2009sep29,0,78151.story  The victims included "retirees on fixed incomes," so of course we're supposed to feel especially badly for them. 

But let's save some of our condemnation for the victims.  Halstead and Rowzee raised money by promising investors returns of 35% in three months.  It's easy to excuse investors who would swallow these lies for being simply naive.  But I think their incredible greed rather than their naivete was responsible for their losses.  The investors were as greedy as Halstead and Rowzee- they all saw a chance for ridiculously easy money and went for it.  So long as people base their actions on greed rather than reason, swindlers like Halstead and Rowzee will always be among us.