I do feel sorry for them. That's why there are rules limiting this to accreditied investors.
Hopefully, they can get back income taxes paid on the phony gains, and maybe some partial recovery.
Yes, it was stupid, but I guess they made their money by hard work, not investing.
Let me speculate here -
They probably did what many people do when looking for a professional - ask their friends. And their friends were nice people, and had some money, but I guess none of their friends ran a hedge fund or worked for an investment bank or ran a family office.
Contrast that with -
If you are looking for a good doctor - do you ask your friends, or do you ask another doctor or a nurse ? It is likely your friends may not know much about doctors...
When I needed a specialized lawyer recently, I asked a friend who is a lawyer and past president of the local bar association.
*******
True story from long ago -
A guy at work is worried about his kid, he has taken the kid to 3 different doctors and they can't figure out what's wrong.
So I talk to him about for a little while, and then this comes out - "My brother's brother-in-law is head of XYZ specialty at Stanford, should I ask him for a recomendation of a doctor ?"
Well, duh, he might know who the other good doctors are... |
