Ponzi-Proof Your Portfolio

Avoid falling victim to a ponzi scheme, with these 5 easy-to-understand tips to avoid falling victim to the next ponzi scam artist.



- Check out the accountant. Call the firm, demand a client list, ask who audits the money-management firm you're considering. A fraud always involves the bean counter.

- Ask the money manager to explain in laymans terms how he (or she) invests. Dont be shy about asking questions. If he (or she) cant explain it, it may be because he (or she) doesn't have a decent (or legal) strategy.

- Do not assume that someone else has done the due diligence. This is huge. Just because there are important or smart people involved, it doesn't mean they have checked the company out.

- Check out FINRA BrokerCheck, a free online tool to help investors check the professional background of current and former FINRA-registered securities firms and brokers.

- Never, ever, put all your eggs in one basket. Even the SEC, apparently, can be fooled.

What is a ponzi scheme? The Ponzi Scheme Explained

I was on Youtube again, and I found this great AP video that explains what a ponzi scheme is, in very easy to understand terms.

The Madoff of medicine?

A doctor in the United States is accused of faking data in 21 published studies linked to painkillers such as Vioxx and Celebrex.

There's been so much about corruption in the news lately whether it's on Wall Street or from bugs in cyberspace or scam artists looking to steal our money, our privacy and even our identities. Now there's news of fraud of another kind.

In what has been described as the longest and most wide-ranging case of scientific fraud, Dr. Scott Reuben, a renowned Massachusetts anesthesiologist, has been accused of fabricating data (and in some cases even inventing patients out of thin air) from 1996 to 2008 in 21 published studies. The fraud has rocked the medical community with Scientific American calling Reuben the medical equivalent of Bernard Madoff, the former NASDAQ chairman who is awaiting sentencing for his admitted $65-billion fraud.

Reuben, who is currently on leave from the Baystate Medical Center (located on one of the campuses of Tufts University School of Medicine), studied the use of several drugs to relieve pain and speed recovery after surgery. The hospital has since asked the journals who had published Reuben's work to retract the studies, some of which reported favorable results from Pfizer Inc.'s Bextra, Celebrex and Lyrica and Merck & Co. Inc.'s Vioxx. His research also claimed Wyeth's antidepressant Effexor could be used as a painkiller.

"Dr. Reuben deeply regrets that this happened," his attorney, Ingrid Martin, told the Associated Press. "Dr. Reuben cooperated fully with the peer review committee. There were extenuating circumstances that the committee fairly and justly considered."

While Dr. Reuben's research was not included with the clinical trials that led the US Food and Drug Administration to approve Celebrex and Lyrica, his work was considered widely influential on how doctors treat surgery patients for pain.

"Doctors have been using (his) findings very widely," said Dr. Steven Shafer, editor of Anesthesia and Analgesia. "His findings had a huge impact on the field."

As a result of Dr. Reuben's fabricated studies, Shafer said researchers would need to re-examine the literature and may be forced to repeat clinical trials.

Critics condemn 'marketing studies'

According to media reports, Pfizer gave Reuben five research grants between 2002 and 2007, and he was also a paid member of the company's speakers bureau, giving talks about Pfizer drugs to colleagues.

Pfizer said in a statement that it was not involved in the conduct of any of these independent studies or in the interpretation or publication of the study results.

"Independent clinical research advances disease treatments and improves the lives of patients," Raymond F. Kerins Jr., a Pfizer spokesman, told The New York Times. "As part of such research, we count on independent researchers to be truthful and motivated by a desire to advance care for patients. It is very disappointing to learn about Dr. Scott Reuben's alleged actions."

Pharmaceutical companies routinely hire physicians to conduct studies of drugs that are already approved. Companies say these studies are legitimate preliminary investigations of new uses for their products. But critics allege that drug companies often underwrite studies of little scientific merit in hopes of persuading doctors to prescribe the medicines more often.

As a result of the Reuben fraud, some critics are calling for a crackdown on the use of small scientific studies for ‘marketing purposes'.

Newspaper future in advertising: Google CEO

Google Inc.'s chief executive Eric Schmidt told newspaper publishers Tuesday that they should continue to rely on advertising but seek new ways to reach readers.

Without providing any specific recipes, Eric Schmidt laid out a few possibilities, including a site for medicine similar to the online encyclopedia Wikipedia, which lets users collectively contribute and edit entries. He urged publishers to focus on mobile technology and the development of new platforms for delivering news.

Schmidt said there's still room for subscription and pay-by-the-piece journalism but he emphasized advertising, the source of 98 per cent of Google's revenue, thanks to its success matching ads with a user's search terms and other keywords.

"The important thing here is that advertising that is useful is going to work," he said.

Schmidt commended newspapers for staking claim on the Internet in the 1990s but said there wasn't a second act. He says news websites take too long to read, even slower than flipping through a newspaper or magazine, a shortcoming that can be addressed by improving technology.

"At Google we're working hard to address the technological questions," he said at the Newspaper Association of America's annual convention. "We don't have any answers here."

He said technology for reading news on devices like mobile phone must ultimately be as pleasant as reading a magazine.

"From my perspective, the online experience can be thought of as terrible compared to what I view as this wonderful experience with magazines and newspapers."

Schmidt's wide-ranging remarks for about 45 minutes came before an audience whose businesses have plummeted as the recession compounds a decline in print advertising that began with the shift of some advertising to free or low-cost alternatives online.

Schmidt told reporters he was deeply concerned about the decline in quality journalism but had no easy answers for the industry's woes.

His appearance came one day after The Associated Press announced a news industry initiative to track down copyright violators on the Internet and try to divert traffic from Web sites that don't properly license news content. The AP didn't name any potential targets, but some news reports focused on Internet search engines like Google.

Schmidt said Google has a multimillion-dollar licensing deal for AP content.

"I was a little confused by all the excitement in the news in the last 24 hours," he said.

Dean Singleton mistakenly says "Obama bin Laden"

I was on Youtube just a little while ago and I came across this somewhat funny (well, to me anyways) video... considering the last posting was also about Dean Singleton.. fitting to put it now I suppose ... Coincidence I found it right now though? hey, I wasn't searching, I just found it! Check it out, let me know what you think...

Dean Singleton, chairman of the Associated Press board mistakenly calls U.S. President Barack Obama, Obama bin Laden.

The AP wants to outlaw search engine linking? What?

The AP is launching an all out assault on any use of its content that is not licensed (read that as purchased) for use by Internet publishers and search engines.

The AP is not JUST focusing on the blatant violators such as spam type blogs or sites that quote paragraphs without attribution or link backs. On the contrary, the AP is specifically going after bigger mainstream blogs, Internet publications and, believe it or not, search engines such as Google and Yahoo.

The AP believes that desperate times call for desperate measures and that means demanding royalties from any company profiting from any aspect of their content. When Google links to an AP story in a search result with an Adwords ad on the page the AP expects to be paid. Include a rewritten headline link to an AP story, Matt Drudge and you will be sued for payment by the AP. Add a paragraph snippet of content from an AP article in your PaidContent.org blog post and be ready for a call from an AP lawyer demanding their cut of your ad revenue.

From the AP's perspective, the concept of fair use is primitive and counter to their desperate desire to prevent their demise in an ad supported Internet content economy. The Associated Press Board of Directors, which is made up mostly of newspaper executives, has issued a member call to arms against anyone and everyone who misappropriates AP content.

The release quotes AP Chairman Dean Singleton who spoke at the AP annual meeting in San Diego, "The news cooperative would work with portals and other partners who properly license content – and would pursue legal and legislative actions against those who don't." Mr. Singleton added, "We can no longer stand by and watch others walk off with our work under misguided legal theories."

Thoughts? Do you agree or disagree with the AP on this one? will it have the desired effect for them, or do you feel this is something that will backfire?

$1.6 billion went to bailed-out bank executives

A study by the Associated Press (AP)found that banks that are getting taxpayer bailouts, awarded their top executives nearly $1.6 billion in salaries, bonuses, and other benefits last year.

The rewards came even at banks where poor results last year foretold the economic crisis that sent them to the government looking for a rescue from the crisis.
Some trimmed their executive compensation due to lagging bank performance, but still forked over multimillion-dollar executive pay packages.

Benefits included cash bonuses, stock options, personal use of company jets and chauffeurs, home security, country club memberships and professional money management, the review of federal securities documents found.

The total amount given to nearly 600 executives would cover bailout costs for many of the 116 banks that have so far accepted tax dollars to boost their bottom lines.

Representative Barney Frank, chairman of the House Financial Services committee and a long-standing critic of executive largesse, said the bonuses tallied by the review amount to a bribe "to get them to do the jobs for which they are well paid in the first place.

"Most of us sign on to do jobs and we do them best we can," said Frank, a Democrat from Massachusetts. "We're told that some of the most highly paid people in executive positions are different. They need extra money to be motivated!"

The AP compiled total compensation based on annual reports that the banks file with the Securities and Exchange Commission. The 116 banks have so far received $188 billion in taxpayer help.

Among the findings:

-The average paid to each of the banks' top executives was $2.6 million in salary, bonuses and benefits.

-Lloyd Blankfein, president and chief executive officer of Goldman Sachs, took home nearly $54 million in compensation last year. The company's top five executives received a total of $242 million.

This year, Goldman will forgo cash and stock bonuses for its seven top-paid executives. They will work for their base salaries of $600,000, the company said. Facing increasing concern by its own shareholders on executive payments, the company described its pay plan last spring as essential to retain and motivate executives "whose efforts and judgments are vital to our continued success, by setting their compensation at appropriate and competitive levels."

Goldman spokesman Ed Canaday declined to comment beyond that written report.

The New York-based company last week reported its first quarterly loss since it went public in 1999. It received $10 billion in taxpayer money Oct. 28.

-Even where banks cut back on pay, some executives were left with seven-or eight-figure compensation that most people can only dream about. Richard Fairbank, the chairman of Capital One Financial Corp., took a $1 million hit in compensation after his company had a disappointing year, but still got $17 million in stock options. The McLean, Va.-based company received $3.56 billion in bailout money Nov. 14.

-John Thain, chief executive officer of Merrill Lynch, topped all corporate bank bosses with $83 million in earnings last year. Thain, a former chief operating officer for Goldman Sachs, took the reins of the company in December 2007, avoiding the blame for a year in which Merrill lost $7.8 billion. Since he began work late in the year, he earned $57,692 in salary, a $15 million signing bonus and an additional $68 million in stock options.

Like Goldman, Merrill got $10 billion from taxpayers Oct. 28.

The AP review comes amid sharp questions about the banks' commitment to the goals of the Troubled Assets Relief Program, or TARP, a law designed to buy bad mortgages and other troubled assets. Last month, the Bush administration changed the program's goals, instructing the Treasury Department to pump tax dollars directly into banks in a bid to prevent wholesale economic collapse.

The program set restrictions on some executive compensation for participating banks, but did not limit salaries and bonuses unless they had the effect of encouraging excessive risk to the institution. Banks were barred from giving golden parachutes to departing executives and deducting some executive pay for tax purposes.

Banks that got bailout funds also paid out millions for home security systems, private chauffeured cars, and club dues. Some banks even paid for financial advisers. Wells Fargo of San Francisco, which took $25 billion in taxpayer bailout money, gave its top executives up to $20,000 each to pay personal financial planners.

At Bank of New York Mellon Corp., chief executive Robert Kelly's stipend for financial planning services came to $66,748, on top of his $975,000 salary and $7.5 million bonus.
His car and driver cost $178,879. Kelly also received $846,000 in relocation expenses, including help selling his home in Pittsburgh and purchasing one in Manhattan, the company said.

Goldman Sachs' tab for leased cars and drivers ran as high as $233,000 per executive. The firm told its shareholders this year that financial counseling and chauffeurs are important in giving executives more time to focus on their jobs.

JP Morgan Chase chairman James Dimon ran up a $211,182 private jet travel tab last year when his family lived in Chicago and he was commuting to New York. The company got $25 billion in bailout funds.

Banks cite security to justify personal use of company aircraft for some executives. But Representative Brad Sherman (D-Calif.) questioned that rationale, saying executives visit many locations more vulnerable than the country's security-conscious commercial air terminals.

Sherman, a member of the House Financial Services Committee, said pay excesses undermine development of good bank economic policies and promote an escalating pay spiral among competing financial institutions - something particularly hard to take when banks then ask for rescue money.

He wants them to come before Congress, like the automakers did, and spell out their spending plans for bailout funds.

"The tougher we are on the executives that come to Washington, the fewer will come for a bailout," he said.

All of this leads me to once again ask....

WHERE'S MY BAILOUT??