Thursday, April 14, 2011

"Protecting investors"

Yesterday we learned that one of our Mighty Atlases of business, Mark Hotchin, was such a financial whizz that he was scammed by a Ponzi scheme. The reason we're only hearing about this now is because at the time Hotchins' name was suppressed. The justification? To protect investors in his finance company, Hanover Finance, from the shock of finding out that the man they had entrusted their money to was a moron.

That's not "protecting" investors - its enabling their predation. If the director of a financial institution can't understand the maxim that "if it sounds too good to be true, it probably is", then that is something that strikes at the credibility of that institution, and which its investors very much need to know. But instead, Hotchin's identity was kept secret, to protect his reputation for financial propriety - in the process allowing him to squander hundreds of millions of dollars of investor's money, while fleecing them for enormous dividends.