Accounting Essay, Research Paper

People with money need to be extremely careful whom they build relationships with. There are always slime balls out there looking for the easiest way to make a living. Whether it s their friends, spouse, banker, accountant, or broker they need to know and trust these people.

Being smart with your money is one of the keys in becoming rich. In the fraud story I read, Carl was smart with his until he started dealing with a firm called Dewey Cheatem and Howe. After making all this money, I don t know why Carl decided to be so careless with it; maybe Joe Lacerno was a great salesman. Like it said in the story, Dewey Cheatem and Howe played Carl like a violin, but it would have been so easy for Carl to decide against buying this stock that had no market value.

There are many things Carl could have done to avoid this loss. If Carl had done a little research he would have discovered that the firm was under investigation by the FBI for pump and dump scams. That fact alone would have kept me from dealing with the firm. Carl didn t have any idea what the company he was investing in did. If I were going to invest a bunch of money into an unknown company I would at least want to know what the company did. Unless you know everything about a company, it is usually the smart choice to invest with a better-known company. Carl was a relatively unsophisticated compared to Joe Lacerno and Joe knew this. With all his money, it would have been very easy for Carl to hire someone to manage his money and deal with leeches like Joe Lacerno.

Carl ended up with 100,000 shares that nobody wanted to buy, and lost 3 million dollars, but this whole situation could have been avoided if he would have done some research and found out about Dewey Cheatem and Howe.