Someone Didn't Meet Investment Banking Thresholds In San Francisco

Investment banking is a fast-paced, high-powered business. Deal flow drives egos, reputations, and compensation. Bankers place large amounts of capital into circulation. The bigger the deal, the harder they work. They do not waste time with small deals. That is why it is so hard to believe some San Francisco blowhards who have claimed in my presence that their small-time reputations came from really big deals.

The Dummies book series describes the revenue threshold separating investment banks from business brokers. Small businesses don't need the specialized services of expensive investment bankers when they are better off finding a generalist intermediary. Most entrepreneurs who have bought or sold a small business figure this out on their own. Hilarity ensues when someone who has never owned a business tries to claim they know how this works.

I met the biggest lying phony of a lifetime a few years ago in American Legion Post 911 in San Francisco. The Legion took forever to shut that phony Post down but its sad legacy lives on in the denials of its former prime movers. The lying phony once claimed on Yelp that he had hired Goldman Sachs to sell his unspecified business, which of course never existed. Try getting a Goldman banker on the phone for any deal worth less than $100M or so and you'll be lucky if they don't just bust out laughing. Maybe a young top-shelf i-banker would take a deal under that threshold if they were totally stupid, or if they worked for a managing director who wanted to force them out for lack or revenue.

Another pathological liar crossed my path around 2012 through some investor relations events that I no longer attend. The guy's claimed record of bulge bracket deals in remote islands made no sense, especially after he started promoting penny stocks. That's a step down in prestige and income from globetrotting i-banking. His further connections to "deals" with companies having no verifiable revenue or visible operations made me shake my head. I can't be around people with such bizarre notions of successful deal-making.

Glib talk about deal thresholds can fool a lot of otherwise intelligent people. It doesn't fool me. I just love studying financial minutiae. Red flags fly fast and furious when someone within earshot brags about closing deals that can't be verified with simple sleuthing. The SEC doesn't always pursue small-fry liars like the Legion Post 911 idiot or the island-hopper. I enjoy picking up the trail where regulators leave off.

Gullibility, Distractibility, And Availability In Undue Influence

Dr. Patrick O’Reilly, author of Undue Influence: Cons, Scams and Mind Control, shared his wisdom today at the Commonwealth Club.  I learned enough about three major definitions - gullibility, distractibility, and the availability heuristic - to reduce my own chances of getting ripped off.

Gullibility is our natural state during periods of emotional vulnerability.  We accept presented information less critically when we are weakened by stress or trauma.  Distractibility from noise, crowds, and everyday details diverts our attention from critical thinking.  The availability heuristic is the human tendency to accept vivid imagery that has an emotional impact.  These biases combine with other forces to enable con artists to rip people off.  Read Undue Influence for more details on fallacies and traps.  

This line of work is relevant to me for a couple of reasons.  I first encountered multilevel marketing (MLM) scams during my active duty military service in the mid-1990s.  I knew enough about how these schemes worked from the junk mail I used to receive in college.  Several fellow officers pitched me MLM ideas of various stripes, all of which I rejected once I realized what they were.  I was very disappointed that people who pledged to live honorable lives were trying to prey on people junior to them in rank.  I was very polite and professional when I declined all further contact with these losers.  

My most severe encounter with fraud came a few years ago in San Francisco.  One very charming but disgusting veteran wore falsified valorous decorations on his uniform while defrauding donors who supported veterans organizations.  American Legion Post 911 in San Francisco was the vehicle for this scam.  That post's continued existence brings shame to the veterans' community of San Francisco.  The victims and incurious dupes who continue to enable the primary con artist's fraud don't strike me as particularly vulnerable or easily distracted.  They are mostly accomplished professionals, making their continued collaboration with a scammer all the more inexplicable.  Social proof probably plays a role among people who can't bring themselves to admit being hoodwinked over cocktails at their private club.  I accept that they don't want to explain themselves to me.  They will eventually have to explain themselves in court.

Bernard Madoff's Ponzi scheme proved that even successful investors fail to perform due diligence when someone in an affinity group possesses asymmetric information.  That's the best explanation I can find for high-profile fraud among the elite.  Extraordinary claims of fantastic results may seem completely plausible to high achievers who are accustomed to obtaining extraordinary results themselves.  It takes a Herculean effort to show them the truth.  I'm up to that challenge and I have facts on my side.  Bring on the "Mickey Mouse" opposition.  

Helping Veterans Isn't My Calling In Life

My loyal readers recall that I publicly broke with the San Francisco veterans' community some time ago.  It was a gradual break.  I tried to make a difference by serving on the city's Veterans Affairs Commission and volunteering with the American Legion.  It was all for naught.  I can only relate to high-quality people and this particular veterans' community is overwhelmed with bottom-feeders.

I can only take so much stupidity in life.  I got tired of hearing veterans scream for more government benefits when they could easily be working for a living.  I did not want to be around liars and scammers who were perennially unemployed.  I did not want to deal with emergency calls to the War Memorial Veterans Building for drug overdoses or explain open flames to city officials.  I detested in particular one Stolen Valor fraud who got a free pass for years and still runs around town claiming victimhood.  That fake "ronin" guy claimed a background in real estate that no one could verify.  He will eventually face indictment for his schemes but that won't stop the other frauds running around who are very much like him.  The few real leaders in the community who were doing great work considered me to be their heir apparent.  I ran away from that role once I realized I could not save the rest of the veterans' community from itself.

There are such things as "professional veterans" whose primary aim in life is to exploit the compassion of the non-veteran population.  These pros don't want careers.  They want society to pay them to do nothing.  I don't think the professional veterans comprise more than a small sliver of the entire veteran population but they give the rest of us vets a bad name.  I don't like having my reputation dragged through the mud by association with walking leeches.

Veterans who want to be productive in civilian life should join VetsinTech.  They launch nationally this week and I'll be on hand at their San Francisco kickoff event.  These veterans are not the whiny losers that the media and other veteran "leaders" like to portray.  Join us at Rackspace in San Francisco this Thursday to watch veterans build their own projects.  Stolen Valor scammers will not be allowed entry.  Whiners and leeches need not apply.  Veterans pursuing tech careers don't need handouts from me or anyone else, because they're proving they can help themselves.  

American Legion District 8 in SF is Totally Worthless

The American Legion's District 8 in San Francisco is not worth the time or effort of any productive veteran.  Anyone who tries to get involved here will waste a tremendous amount of energy with no positive result.  The American Legion in San Francisco is too far gone to be responsive to a salvage effort.  I have learned this from personal experience.

District 8 has reinstated a fraudulent post and allowed that post's corrupt leadership to once again assume positions of trust and responsibility.  The District has learned nothing after seeing the good name of veterans dragged through the mud by a Stolen Valor fraud.  Other post commanders have included a convicted felon running an illegal bingo parlor and a renegade attorney who was disbarred in California.

The San Francisco veterans' community seeks to retain use of the War Memorial Veterans Building but cannot even utilize the space they are currently allotted.  The SFWMPAC Board of Trustees is charged with fully utilizing this City-owned space to deliver full value to taxpayers.  I say let the San Francisco Opera and the arts community have the entire building.  They have a solid plan to utilize every square inch of space and can commit money and expertise to fulfill that plan.

Veterans don't deserve the building anymore.  The veterans' presence inside the WMVB is nothing more than a magnet for an endless parade of addicts, vagrants, lunatics, and scam-artist "commanders" whose greatest ambition in life is to rub two government benefit checks together.  Each derelict who stumbles through the front door degrades the veterans' community and the dignity of the building.  The Trust Agreement governing use of the building grants veterans the right to use space but IMHO this commitment can be met with a minimalist allocation.  Veterans can claim a shoebox under the desk of the WMVB's Managing Director, which is all they can productively utilize anyway.  Evicted veterans' organizations can reconvene off-site in a suitable alternate locale, such as the nearest junkyard or toxic waste dump.

District 8 is a waste of everything and then some.

Full disclosure:  I am a veteran.

Open Questions for The City Club of San Francisco

The City Club of San Francisco is a renowned private club in this town.  I have attended many events there as a guest of other organizations that rented the club's event spaces.  I have considered becoming a member but I am concerned about how the club is handling a very serious case among its membership.  I would like to pose the following questions to the leadership of the City Club and its exclusive 155 Society.

Do you believe that City Club members should be of strong moral character?  If so, do you tolerate members who lack personal integrity?  I define personal integrity as the ability to distinguish right from wrong and to tell the truth.

Is there anyone in the City Club who habitually exhibits a lack of personal integrity?

Is there anyone in the City Club who wore falsified military decorations while on active duty with the US Army?  This is commonly called "Stolen Valor" among service members and veterans.

Is there anyone in the City Club who claims to have a background in business (most likely real estate) yet is unable to verify title records or transaction details from their alleged career?

Is there anyone in the City Club who has accepted charitable donations and spent them with no accountability or verifiable results?

Is there anyone in the City Club who has been expelled from the American Legion for fraud and misconduct?

My colleagues and I have tried to contact members of this club but they do not seem to be concerned about this matter at all.  I will raise the issue here for the general public to see.  I do not expect a response but City Club officials can reach me at (415) 317-9005 if they're so inclined.  I am morally obligated to ask these questions because Immanuel Kant's Categorical Imperative demands that I seek justice.

Questions for the San Francisco Prayer Breakfast

The local supporters of the national Prayer Breakfast phenomenon held their annual breakfast today at the City Club.  I have open questions for them.

Do you believe that a Christian should possess personal integrity?  I define "personal integrity" very broadly as the general ability to distinguish right from wrong and the ability to tell the truth.

If so, do you tolerate members of your group who do not possess personal integrity?

Do you know anyone who has willfully and repeatedly worn unearned military decorations and has been expelled from the American Legion for misconduct?

Do you believe that military veterans who engage in fraud and misconduct after leaving the service should be held to account in a court of law?

I do not expect this group to answer me but I had to publish this article to put my concerns on the record.  My colleagues already know how I would answer these questions.

SF American Legion Does Justice 02/10/2011

Local veterans upheld honor today by rendering a verdict on corruption. I'm glad I was able to offer testimony.