The Economics of Scams

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What exactly was the Harshad Mehta Scam of 1992? And how do scams happen in the first place? Book of Sins attempts some answers.

For as long as there has been finance, there have been scams. Whether it is Nigerian princes emailing you to transfer money, or Bernie Madoff promising impossible returns, or a sketchy startup raising money, Enron manipulating accounts or brokers and bankers manipulating the stock market.

India got its first mainstream taste of it in 1992 when the equity scam broke after super broker Harshad Mehta landed himself into a soup with the SBI. What was the economic story behind it? What Econ frailties of ours do scamsters and fraudsters exploit? And why do we fall for them? My podcast, Book of Sins, is an Econ exploration of these questions and an attempt to break down the mechanics and the characters of financial scams into easily understandable points.

If you enjoyed the teaser above for the first season that deals with the 1992 Stock Market scam in India, why not give the whole thing a listen?

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