Situational Factors in the Building of Trust
Pretend for a moment that you are Bernie Madoff and are running the largest Ponzi scheme in history. What do you need in order to keep it going? You need a steadily growing supply of trust. Ponzi schemes collapse if too many investors lose faith and withdraw their money. To prevent that from happening, you need more and more investors to trust you with their money, just so you can continue to provide illusory gains to your longer-term clients.
Bernie Madoff did this for almost thirty years. He preyed upon the natural human inclination to trust, as all con artists do. By some estimates, Madoff defrauded his investors out of $10 billion to $17 billion.1 If you look at the details of how ...