I could not resist writing at Medium.com about the teen trader who recently duped a journalist from New York magazine into believing he had made $72 million trading gold and other alternative assets. It’s not like auditors don’t get fooled every day by fake documents. The difference is most journalists are liberal arts majors with very little experience examining bank and brokerage statements. The business beat is one to two years too smart for words New York newbie journalism graduates have to spend slumming until they can do something more fun like fashion shows and movie or restaurant reviews.
Auditors, on the other hand, get paid billions to know their trade and always have the “experts across a global firm behind them”. They should have experience looking at similar documents for clients who have the same firms —or state governments —as business partners. Someone on the team with some seasoning should be able to spot a fake Chase bank statement or a fake State of Illinois invoice.
The Guardian’s Heidi Moore, with independent investigative journalist Roddy Boyd, outlined all the ways everyone involved should have spotted the fish story. Basic restrictions on minors having brokerage accounts and lack of banking connections, wild exaggeration and the mathematical impossibility of the huge numbers being touted, and the vague nature of many of his claims including an obvious explanation of when and who paid the taxes on the gains should have raised serious doubts long before Pressler’s story got anywhere near print.
The Guardian reported that Islam showed Pressler and a New York magazine fact-checker a fake JPM Chase bank statement to back up his results. I found that to be the most intriguing part of the story.
As part of the research process, the magazine sent a fact-checker to Stuyvesant, where Islam produced a document that appeared to be a Chase bank statement attesting to an eight-figure bank account,” the magazine said in its statement. The author of the profile also said she saw a bank statement.
Read it and weep for the journalist who missed out, because of the embarrassing fiasco, on a new job at Bloomberg, where I’ve heard the canteen vending machines spit out free everlasting gobstoppers all day long.