We entered a new age of conmanning as the social media era began.
Gone are the days where a sturdy jawline, sharp clothing, and smooth talking were needed to trick investors out of big $$. Today a creepy looking, unkempt, possible construct like Sam Bankman-Fried of FTX who wears shorts and does not appear to shower can trick everyone along the financial bell curve from the most supposedly sophisticated elites to the average Joe investor to the teenager desperate to become a crypto billionaire off of a few dollars of his parents money.
How did this happen?
For starters, allow us to begin with the elites. The older members of the financial aristocracy are, by their nature, behind the times when it comes to technology. They are rarely the first adopters of new tech and therefore have to rely heavily on the word of executives in whose companies they are considering investing.
How does one consider an investment opportunity in an era where revenues and clear uses of technology may be either vague or non-existent? They use the same methods as investors in days of old; they focus on the people.
Investors of generations past may have wanted to hear about strategic plans and meet executives face to face to feel the firmness of their handshake and seriousness of their presentation. Today, investors have grown accustomed to seeing the anti-executive tech CEO. He wears a too-tight black t-shirt, jeans, fashionable sneakers or even flip flops, and often a raggedy hoodie to serve as icing on the anti-CEO fashion cake.
This 'look' inspired by Mark Zuckerberg has led to copycats, seeing him less as a source of style inspiration, but rather emulating him in hopes that appearing in his style of raiment will bring to them similar success in business and in obtaining investments. Dress for the job you want, as they say.
This strategy has been given confirmational support as countless new-CEOs have become billionaires off of investment fueled company growth. Investors, despite being intelligent people, are herd-prone just like we all can be. They see their competitors buying into certain types of software or crypto companies and anti-CEOs with the "right" look and want to do the same.
This trend has been occurring for close to twenty years now, it is nothing new. In fairness, too, many of these CEOs, like Zuckerberg, have generated enormous wealth and created profitable companies. Despite the herd mentality that has formed, it is not always without merit.
Sam Bankman-Fried, now of FTX infamy, took the anti-CEO appearance to new levels. From his unhealthy, possibly psychopathic facial appearance and his wannabe Einstein hair to his tube socks and shorts worn in public appearances, SBF comes across as a constructed middle finger to the tech finance aristocracy.
It was as if someone with an ax to grind against tech investors and major banks decided to design a character for SBF to play in public just to see how many people they could fool.
I have no evidence of SBF being a construct (i.e. a man playing a made up role invented by an intelligence organization), I am merely wondering aloud whether someone could create a character more absurd to con their enemies. Being conned is painful, but being conned by a man-child who still needs his mother to remind him to shower injures equally the soul, the wallet, and the reputation.
Humans may be hardwired to see certain features as trustworthy (think of the clean-cut, symmetrical appearance of the average news anchor), but we can ignore our instincts with enough rewiring. In the years leading up to SBF's FTX con, there was plenty of contrasting education available to soften the instincts of investors.
Not only did SBF fit the bill of the anti-CEO investors have grown to love and trust, but he had family, friends, and an alleged girlfriend/business partner in high places to help erase any doubts those who met him might have had. The breakdown in the following link helps to outline SBF's sphere of connections and business partners and how ingrained they are in the educational, financial, and Democratic political aristocracies.
With his connections and possibly constructed anti-CEO appearance, it is no wonder that even a skeptical sophisticate could be fooled into trusting him with their money and/or reputation. Fooling people in politics with massive donations is as easy as writing a check, and while fooling investors might be trickier, it takes only a bit more effort when one can point to the right connections.
Those at the lower and middle portions of the investment bell curve fell for the same tricks, just at a less sophisticated level. Many were looking to get rich on crypto or wanted to help move us into a DeFi future and ignored warnings to better store their coins, instead trusting FTX to operate like a savings and loan bank.
They saw the same anti-CEO appearance one might expect a Crypto industry CEO to present and did not need to see the credentials high level investors expect, because they do no know to look for these credentials. "Big investors trust FTX, how could I know better than them?" may well have been the logic, and in many other cases this logic is sound, particularly in the modern quant-driven investment world.
Now SBF and his alleged girlfriend Caroline Ellison, the pauper's version of Bonnie and Clyde our age deserves, are attempting to evade capture and extradition to the US, with rumors of a possible escape to Dubai circulating. While we await their fate, FTX has filed for bankruptcy and the fate of affiliated firms, indeed entire segments of the Crypto industry remain uncertain.
There is much about the present and future of the industry and SBF that remains murky, but the above can help us to understand how such an absurd appearing character pulled off a fraud that makes Bernie Madoff and other great conmen of old look unsophisticated or at least less than creative.
SBF broke every rule a conman should in theory follow and was still able to con the most ostensibly sophisticated investors a CEO seeking capital and support could approach. It took a manchild to make the work of other famous conmen's look like child's play, but do not expect him to be the last of his kind.
There is too much money in Crypto and too little technological sophistication among the investor class for this to not occur again, but perhaps tech and finance journalists can make a stronger effort to dig into the connections and capabilities of future executive without assuming they are future trillionaires hell-bent on saving the world.
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