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The Construction of a Trustworthy Investment Opportunity: Insights From the Madoff Fraud
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The Construction of a Trustworthy Investment Opportunity: Insights From the Madoff Fraud

Hervé Stolowy, Martin Messner, Thomas Jeanjean and Charles Richard Baker
Contemporary accounting research, Vol.31(2), pp.354-397
01/01/2014

Abstract

Investments Trust Stock exchanges Asset requirements
Economic exchanges rely to a great extent on information provided to and obtained by investors from different sources and channels. Economic theories of financial markets have long recognized the central role of information in animating markets (e.g., Arrow 1963; Ball and Brown 1968; Arrow 1984). Information is at the heart of any contractual relationship. It allows investors to make “informed” investment decisions and to verify whether other contracting parties fulfill their obligations.
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