August 4, 2014

Who is susceptible to financial fraud?

According to research by Stanford and Yale neuroscience and psychology professors, investment fraud victims report higher impulsiveness and demonstrated less cognitive flexibility that non-victims.
Note that cognitive ability was NOT found to be related to fraud. Neither did victims prefer to take more risk than non-victims.  Many investment fraud schemes target educated white males who have proven to be susceptible to investment fraud.
“Together, these findings provide a first deep glimpse into factors that may confer vulnerability to investment fraud. Interestingly, cognitive abilities were not significantly impaired overall in fraud victims. Neither did fraud victims uniformly prefer to take more risk than non-victims. Fraud victims did, however, show reduced impulse control, and this was particularly apparent in the face of large potential gains. We interpret these findings to suggest that an inability to control one’s impulses under high stakes may confer vulnerability to investment fraud (and that behavioral assessments might be necessary to detect such a predisposition).” Details at:

No comments:

Post a Comment

Financial Planning for Women does not sell, rent, loan, lease or otherwise provide any personal information collected at our site to any third parties.