Homework Question on Financial Scam and Schemes
- The objective of this research paper is to develop a better understanding of causes and consequences of financial scams.
- These scams affect financial contracting by making them more expensive, as trust reduces between the parties. Study the monetary damages, but develop a deeper understanding of the negative societal aftermath of such scams
Homework Answer on Financial Scam and Schemes
This research gives a detailed description of the complex networks observed between bankers, financial regulators, and legislators and how such networks have been used in the past to propel fraudulent activities within financial institutions (Fisher and Lara 23). Similarly, this research highlights the main causes of financial scams and the damages such implications have on investors as well as the impacts created on the general economy.
The study is built on common financial scams and schemes, such as the Pyramid scheme, Ponzi scheme, Get Rich-Quick schemes, Job Search Scheme, and Work from Home Scheme (Fisher and Lara 23).According to Fisher and Lara (20), financial scam is led by people who control and manage the activities of large corporations. In order to gain advantage of the corporation, perpetrators of financial scams are known to subvert internal management methods which financial controllers could used to reduce financial losses while improving on investment levels (Fustey 12).
Financial scammers are known to use institutional apparatus like lawyers, company accountants, legislators and regulators to loot institutional money and other investment assets. This has become a common practice more especially within financial institutions. In connection to financial malpractices, investors have suffered significant losses and still continue to face the challenging trends in various stock markets (Fisher and Lara 23).