OPM--Other People's Money

Other People's Money--"Soc it Tuum"

An article in this morning's paper details charges that another money manager has violated his obligation to investors who have entrusted him to manage their money. This recalled to me a drawing on the blackboard by my corporate finance professor, Pearson Hunt, illustrating the common tendency of individuals to commit abuses with Other People's Money, OPM. The drawing consisted of a coat of arms crossed by a black bar sinister indicating illegitimacy in the family background and a motto at the bottom in mock Latin "OPM Soc it Tuum!" The drawing was used by Professor Hunt to illustrate the perils of investing in "preferred" stock. Too often, the interests of "preferred" stock holders are neglected rather than preferred.

OPM AT ALETHEIA RESEARCH AND MANAGEMENT

Anyway, the article linked below tells the story of a S.E.C. investigation and a lawsuit by the founder of Aletheia Research and Management against the firm and its C.E.O., Peter J. Eichler, Jr. Aletheia's co-founder. Roger B. Peikin's suit cites Eichler's "trading practices, general disregard for regulatory controls, wanton expenditure of corporate assets for Eichler's personal benefit, and overall neglect of the business side of Aletheia's operations." Peikin's complaint depicts Eichler's lavish lifestyle including "the use of private jets and hotel suites ranging from $10,000 to $18,000 per night." Mr. Peikin claims that in 2008 Mr. Eichler transferred $500,000 from client's accounts into Aletheia accounts to buy Chinese currency option contracts. I'm sure Professor Hunt would appreciate the irony of the English translation of the firm's name, "Aletheia" which is "truth and disclosure" according to the firm's website.

OPM AT DISCOVER CREDIT CARDS

A second article, also linked below was headlined "Minnesota Says Discover Cardholders Were Deceived on Financial Products." The article said that the Minnesota attorney general filed a lawsuit accusing Discover Financial Services of "tricking consumers into buying optional products that would protect them from fraud and financial hardship." The lawsuit contends that Discover, one of the largest issuers of credit cards, made "aggressive and, misleading and deceptive" telemarketing calls to get customers to sign up for identity theft protection and a credit score tracker. Does that sound familiar? I seem to recall getting similar calls from an HSBC card that I've since canceled.

COMMENTS ABOUT OTHER ABUSES OF "OPM" ARE WELCOME BELOW.



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Comments 11 comments

Petra Vlah profile image

Petra Vlah 5 years ago from Los Angeles

What else is new? In today's Yahoo financial section there is an article about the banks possition regarding our concerns; the name of the article "get over it".

It is what they think we should all do; our bail money saved their greedy ass, but we should not question them about the way they do business. We should just "get over it" and trust them with our money and say nothing about additional fees or out of control interest rates


Ralph Deeds profile image

Ralph Deeds 5 years ago Author

Thanks, Petra, for another of your usual trenchant comments!


fishskinfreak2008 profile image

fishskinfreak2008 5 years ago from Fremont CA

A lot of POLITICIANS are guilty of this (i.e. of using OTHER PEOPLE'S MONEY IRRESPONSIBLY)


Harvey Stelman profile image

Harvey Stelman 5 years ago from Illinois

Ralph, This has happend throughout history, people won't change. There are good and bad people, is this shocking? H


Jeff May profile image

Jeff May 5 years ago from St. Louis

Fishskin has a point of course, however, the pendulum has swung far to the right, in favor of private sector "white collar" crooks and greedy financiers. We should support sensible regulation.


Ralph Deeds profile image

Ralph Deeds 5 years ago Author

I agree with fishkinfreak, Harvey and Jeff, especially Jeff. Tnx for the comments.


eovery profile image

eovery 5 years ago from MIddle of the Boondocks of Iowa

Those Bas*#&$s. Hang them all.

Keep on hubbing!


Ralph Deeds profile image

Ralph Deeds 5 years ago Author

Thanks, eovery, we can agree on that!


latitude38 profile image

latitude38 5 years ago from tamalpais valley, ca.

ralph, another good post and tips!isn't it amazing how many people eicher must have hustled , a 15 mill. home. this man has no conscience, a sociopath, however discover and the other"lenders" that "mislead" a nice word for fraud is just as bad if not worst. my reasoning behind that statement is that they are a financial institute a" name" were suppose to trust them. i would rather be "taken" by the "two bit con" you know at least he needs the money! hope you a merry xmas ! regards, gary


gr82bme profile image

gr82bme 5 years ago from USA

Ralph, we need to fight them back. Not let it go. They need to see we will not stand for this anymore

Great hub

Thank you


Ralph Deeds profile image

Ralph Deeds 5 years ago Author

Thanks for your comment.

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