gender differential paper IJCRB

ijcrb.webs.com
JUNE 2011
INTERDISCIPLINARY JOURNAL OF CONTEMPORARY RESEARCH IN BUSINESS VOL 3, NO 2
‣ Frank Castaldi raised more than $77million from 473 investors in a ponzi scheme. The
scheme collapsed in 2008, and left him owing $31.6million to more than 300 individuals
and investor groups. In 2010, he was convicted and sentenced to 253 years in prison.
‣ In 2010, a confessed Ponzi Schemer Gerard Cellette Jr. was jailed for 8 years when found
guilty of 36 counts of securities fraud. Cellette confessed that he had run a $53million
scheme, and decided to shut it down himself, and made complete disclosure.
‣ Convicted UK fraudster, Kelvin Foster was jailed for 10 years in 2010 for running an
unauthorized investment business and for stealing investor funds through his £34million
scheme.
‣ Earl Jones pleaded guilty in 2010 for running a pyramid scheme that started in 1982 and
included at least 158 victims. He got an 11years sentence for orchestrating this massive
fraud scheme.
‣ In 2011, David Hernandez was sentenced to 16years in prison in Chicago for swindling
investors of more than $6million. He used the money in a ponzi type scheme, paying
investors with other peoples’ investment.
There has not been any reported high profile conviction in Nigeria. This would have to be seen
as the core of that objective of the inter-agency committee which requires the committee to map
out modalities for pursuing cases against offending companies at the Investment and Securities
Tribunal. An issue to also consider is the current legal framework for charging offenders, and
whether statutorily prescribed penalties are appropriate and adequate as deterrent.
The Wonder Bank Investor
A brief demographic analysis of some failed Nigerian wonder banks investors would throw some
light on the level of investors’ understanding of the risks involved, and the motivation for
investment. It would also serve as a primer for research work on the rationality or irrationality of
investors’ choices. Questionnaire was made available for victims who came out to officially
lodge complaints against their failed wonder banks at various regulatory agencies in Lagos,
Nigeria. Specifically, the questionnaire sought to know:
Name (Optional) of Investor
Education
Profession and Position
Name of the Finance Company/Organization [Wonder Bank]
Age at the time the investments were made
Approximate amount invested
Approximate amount yet to be recovered
The promised return
Other promises made
If the investors perceived any risk in the investment, and the nature of the perceived risk
The investors rated the following risk factors according to how strongly they believe in
the possibility of occurrence (on a scale of 1 – 4, with 1 representing least possibility and
4 representing highest possibility) :
(a) Variation of the share/slot trading price
(b) Possibility of the organization to go bankrupt
(c) Probability of not receiving any dividend/interest in cash
If the investors had any prior experience in capital investments
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