Recommendations come from myriad sources such as friends, family, co-workers, online reviews and even e-commerce algorithms. Studies have shown that recommendations are trusted more than information proffered by media sources or corporate advertising. However, with daily reports of fraud and deception in political and financial spheres, a tide is building that threatens to wash us all in cynicism and suspicion. With “pay to play”, “pay per post” and other hidden agendas, should recommendations still be trusted?
By now you’ve likely heard of Bernard L. Madoff. This hedge fund operator is accused of the largest corporate fraud in United States history, to the tune of $50 billion dollars lost. In a SEC complaint, Mr. Madoff—a former NASDAQ chairman—is accused of a “stunning fraud of epic proportions” by essentially running a Ponzi scheme where new investor money was used to cover losses and pay-out returns to previous investors.