CrimProf Blog

Editor: Kevin Cole
Univ. of San Diego School of Law

Wednesday, October 10, 2018

Lee et al. on Victims of Investment Fraud

Steven LeeBenjamin F. Cummings and Jason Martin (The American College of Financial Services, Students, The American College of Financial Services and Swarthmore College) have posted Victim Characteristics of Investment Fraud on SSRN. Here is the abstract:
Investment fraud constitutes a major problem in the United States. While several studies have investigated various aspects of fraud, none have analyzed victim characteristics of investment fraud. This study posits five fraud languages that, when used by fraudsters, shut down the perceived need to conduct due diligence in their victims: perceived success; air of familiarity; claim to authority; noble pursuits; and framed authenticity. Using the Health and Retirement Study data from 2008, 2010, and 2012, the authors found that respondents who were male, were better educated, were single, and were younger disproportionately reported being defrauded in the past five years. This study also lays the groundwork for linking the five fraud languages to various factors such as financial literacy and dependency arising from questions within the HRS data set. Implications for such findings include protecting individuals near retirement from fraud and spreading public awareness about the importance of due diligence in the investment decision process.

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