Not another Ponzi scheme.

The lineup of disgraced financiers is growing. Danny Pang is the newest entrant. Earlier this week, the Wall Street Journal (“WSJ”) reported that authorities are investigating his firm for…you guessed it…a Ponzi scheme. At stake are $4 billion in assets under the control of Private Equity Management Group.

The picture in the WSJ article is classic. See the link. There’s Pang posing with a star from “Desperate Housewives.” For a $100,000 gift, you can get your picture taken with anyone. Apparently, this prerogative holds true even if the money isn’t yours.

But that’s not the point.

We find similarities every time a new Ponzi scheme is uncovered. Swindlers control the flow of information. They use sexy names to describe their investment styles, like Madoff and the “split-strike option strategy.” And now, I would suggest a third example of recurring behavior:

Philanthropy.

Madoff, Sir Allen Stanford, and Pang were all noted for their largesse among charities. They gave big and grew powerful through the patina of success, excess, or whatever. They became regulars at black-tie fundraising events, which begs one all-important question.

Wouldn’t it be safer to leave formal wear in the closet and just write the check?

About the author

Norb Vonnegut wrote 178 articles on this blog.

Do you ever feel the financial news makes no sense? Do stories leave you with more questions than answers? I created Acrimoney to discuss Wall Street’s behavior behind the headlines. As a veteran of a wealth management business that exceeded $1 billion in assets, I offer insight into the people and the “doings” that affect your money. I’ll start the discussion. But I hope you’ll jump in and say what you think.

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