The Investor Seen From the Other Side: “How to Steal A Lot of Money — Legally” by Edward Siedle

Consider an investment proposal from the seller’s side: what would make a client feel reassured before checking the claims? Edward Siedle offers the reader that uncomfortable perspective.

How to Steal A Lot of Money — Legally uses a provocative handbook for investment scammers to teach financial literacy. Its value for an investor is the exercise of looking at a reassuring proposition through the interests of the person selling it.

What the book actually covers

The contents move from fabricated credentials and appearances of wealth to selecting victims, selling documents, disclosure, professional enablers, fees, performance presentation and asset valuation. Pension material appears among the supplementary readings, but the organizing device is the scammer’s perspective.

In the preface, Siedle contrasts selling comforting investment promises with delivering unwelcome findings to investors. He also traces the project to a deliberately provocative Forbes series begun in 2012. The reversal asks readers to notice what they want to believe before considering who benefits from that belief.

For a professional reader, a useful way to approach the device is to turn reassuring features into questions that can be checked. The polemical voice also needs a skeptical reading: a provocation is a starting point for inquiry, rather than proof about every adviser.

Why it matters for your risk posture

Take a claimed career first: before treating a prestigious employer or qualification as assurance, establish what the person actually did and whether the account can be corroborated. The SEC’s questions for prospective investment clients cover experience, registration and disciplinary history, alongside compensation and conflicts. Those are useful checks regardless of how persuasive a particular seller seems.

Then separate understanding an arrangement from liking the person explaining it. Ask for the basis of a reported return and what has been deducted from it. If a valuation matters to the decision, ask who produced it and how it could be challenged. For our work as investigators, each answer should identify the evidence needed to test the claim.

The word “legally” in the title calls for similar care; we would read it as a challenge to complacency about investor protection, rather than a legal opinion on a particular transaction. Whether conduct is lawful, whether terms serve the investor and whether a representation is accurate are questions to examine separately. A high fee alone should not be treated as proof of wrongdoing.

In our pre-investment due diligence on a fund or manager, we list the side letters, fee schedules and placement arrangements a structure of that kind would normally carry. Each is requested by name, and any that cannot be produced is recorded as a finding. We also note who appointed and who pays each adviser who is supposed to be protecting the investor.

Key takeaways

• Examine the proposition from the seller’s position. Ask what you are being encouraged to accept before you have independently checked it.
• Verify the claim that creates confidence. Establish the background, compensation and basis for reported results before relying on the presentation.
• Keep suspicion proportionate to evidence. Treat an unanswered question as an inquiry to pursue, rather than a conclusion about someone’s honesty.

About the author

Edward “Ted” Siedle is a former SEC attorney and investment-industry executive whose work includes forensic investigations of retirement plans, focusing on fees, risks and conflicts. He has written for Forbes and co-authored Who Stole My Pension? with Robert Kiyosaki.

How to Steal A Lot of Money — Legally, Authority Publishing, 2021, includes a foreword by Curtis Loftis, identified in the book as South Carolina’s State Treasurer.