Fraudulent companies often come unstuck during recessions. That’s because frauds constantly need new sources of cash to stay alive, and in recessions the cash dries up. During recessions investors are less willing to buy shares, banks are less willing to lend, suppliers don’t offer good terms, and customers are slower to pay. Without new sources of cash, the fraud company collapses on itself. The biggest financial frauds in history collapsed at the beginning of recessions. Enron and Worldcom blew up in 2002 after the Dotcom bubble, when investors started to look more closely at high-flying technology companies. Bernie Madoff’s scheme…

Want to continue reading?

Introductory offer: Sign up today and pay €200 for an annual membership, a saving of €100.

Subscribe

Cancel anytime.

Are you already a member? .