Monday, March 12, 2007
Does this sound familiar?
At the peak of a bubble, misleading financial statements and sometimes even fraud abound. The South Sea bubble in the 1720s is the prime example, as most public companies at that time were started in order to defraud the public. The fraudsters are usually exposed only after the bubble has started to collapse, as they find it impossible to continue to fund their enterprises. This is also where the public start to find out that they have been tricked and start crying for blood.