A few months ago, I suggested that citizen gumshoes using the Internet could help regulators spot fraud. It seemed a number of people in finance knew for years that Madoff was likely a Ponzi scheme, but even though one of them, Harry Markopolos, wrote to the SEC, no one did anything about it until Madoff turned himself in years later. The power of information connectivity can allow people to collaborate, and group problem solving has been a particularly powerful genre, whether it be movie-preference algorithms or mathematical proofs. Why not solving crimes?
I wrote money-manager and blogger “John Hempton seems to spot a financial fraud every quarter and has the courage to publicly do so on his blog.” He’s done it again, and this fraud is as big to his home country of Australia as Madoff was to the US. Here’s his version of the events, along with his aw-shucks addendum. The short story is that a reader of Hempton’s blog pointed him towards the suspicious firm given Hempton’s reputation for outing hedge-fund frauds. After concluding the suspect financial firm Astarra was likely a Ponzi scheme, he wrote a letter to the Australian Securities and Investments Commission, and the regulators followed up quickly, shutting down Astarra, which was a manager in the outsourced Australian pension system, their version of Social Security.
Congratulations to John Hempton and the anonymous citizen gumshoe/blog reader.
And why stop at white-collar crime? How cool would it be to see Internet geeks collaborating on Twitter to solve an unsolved murder? #ColdCase. Uhh… it might be better to use anonymous names for those ones.
No comments:
Post a Comment