THE BIZOP NEWS

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Sam Antar has nice piece on Minkow's new services

"My dear friend and mentor convicted felon turned fraud fighter Barry Minkow has a message for deceitful directors and officers of public companies: If you lie about your resume, past experience, and qualifications for your present job and such lies show up in SEC filings, he will find out about it and expose you to investors and regulators.

Minkow and I believe that if you lie about your educational background, you are capable of lying about anything else, too.

Investors require honesty from the fiduciaries running their companies.

If Barry Minkow can find false credentials in corporate America where company gatekeepers have failed, what other more devastating internal control failures exist that we do not know of?"

From Minkow's new website:

"DegreeFraud.com offers a unique approach to investment research, revealing the type of corporate fraud that has sent Wall Street--and Main Street --reeling as a result. Stay ahead of the curve and on top of the truth with our subscription-based information system."

Antar and Minkow are on to something with this new service. But not because people who lie about their credentials might lie about something more material. Collectively, we are set up to respond to "badges of authority" without too much thought.

This compliance technique has been well studied.

One experiment involves a person directing total strangers to put money in a parking meter. The individuals are simply walking by the meter when they are told to put money in the meter. Not surprisingly, a higher number of people comply with the request, if it is delivered by a person wearing a uniform. Uniforms are badges of authority and commands delivered by such a person are treated more seriously. It is no good to say that we should just ignore the badges of authority.

But it is important in your due diligence to review whether you are complying because of a demand made by somone who looks to be an authority. Would you have taken that advice if he or she were wearing a t-shirt or bathing suit?