New Empirical U of C Finance Study Estimates Cost Of Corporate Fraud -- To US Economy: $830 Billion A Year...

This one belongs in this spot because it touches several bad actors we've covered repeatedly here: SBF, Pharma-Bro, CZ, and of course -- right down the center of the fairway, of supposed med devices (that never were): Elizabeth Holmes, Sunny Balwani and Theranos.

But it is -- according to this new study -- far more likely that the garden variety (sub $60 million frauds, per outing -- like those Martin Shkreli engineered, across a decade, and several company / fund iterations) are far more common, and less prosecuted. . . overall. [Let's not forget one Thomas Barrack, as below -- as well. Though technically. . . he was acquitted of the most serious charges.] That's how the finance professors came up with the eye-watering over $800 billion a year figure.

Rather depressingly (at least to me) the profs estimate that as many as one in ten firms of fairly longer standing in the US have committed some form of financial fraud. That's just. . . sad.

In any event, here's the story, from Fortune this morning:

. . .It’s been a hot few years of corporate fraud. A plea deal earlier this week for Binance founder Changpeng Zhao on charges of money laundering comes on the heels earlier this month of FTX founder Sam Bankman-Fried’s conviction for what prosecutors called “one of the biggest financial frauds in American history.” And earlier this year, former Theranos executives Elizabeth Holmes and Sunny Balwani began serving multiyear sentences after juries determined that their aggressive overselling of an unproven blood-testing technology had amounted to fraud.

But what if there is so much more fraud that we just don’t know about? That’s what a recent paper by three finance professors tried to pin down -- and their findings indicate SBF, Holmes, et al. are just the tip of the proverbial, well, you know. . . .

Here's a hat tip, to the University of Chicago prof who led the study -- Luigi Zingales. He worked with economists at University of Toronto, and at Cal Berkeley. Excellent. And so, we will move forward, into the chilly sunshine -- in any event, grinning.

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