Heroes and villains are not limited to the likes of comic books and action films, as a number of these can be found in the financial world. Here’s a quick roundup of the good and bad guys of finance and what makes them so.
At the very top of the good guys list is the “Oracle of Omaha” himself, Warren Buffett. Hailed as one of the most successful investors in the world, Buffett has devoted majority of these profits in investing in social causes as well.
In several of his writings and interviews, Buffett has shared that the rich earn outsized rewards for their talents in a market economy. Because of that, he has long-stated his intention to give his fortune to charity and only leave enough for his children. In fact, he has pledged to give 83% of his wealth to the Bill & Melinda Gates Foundation. In 2010, Buffett and a number of high-profile philanthropists signed the Gates-Buffett Giving Pledge in which they promised to give at least half of their fortune to charity.
Buffett has also invested in political and environmental causes that he believes in, endorsing Democratic party candidate Hilary Clinton for the 2016 election. He has pledged $50 million to the Nuclear Threat Initiative and has made investments in solar power and wind energy.
All talk of philanthropy in the finance world won’t be complete without the inclusion of Bill Gates who left his CEO post at Microsoft to pursue full-time work at the Bill & Melinda Gates Foundation. This foundation was a combination of three family foundations, forming one of the world’s wealthiest charitable institutions with assets of nearly $35 billion.
The Bill & Melinda Gates Foundation is organized into four main programs: Global Development Division, Global Policy & Advocacy Division, Global Health Division, and United States Division. Among the causes they’ve contributed to are the use of genetically modified organisms in agriculture, global sanitation problems, education, and health.
Gates has been regularly part of the Forbes list of wealthiest people in the world, gaining the top spot from 1995 to 2007 then again in 2009. He is also currently the wealthiest person in the US with a net worth of $78.3 billion as of this writing.
George Soros is a legend in the finance world for being the “Man Who Broke the Bank of England” with his massive pound short position during the 1992 UK Black Wednesday crisis. He reportedly raked in $1 billion on this trade and earned his spot as one of the 30 richest people in the world.
Soros has been in the financial arena for quite some time, making him rich enough to donate more than $11 million to various causes since 1979. Around that time, he has helped provide funds for black students to attend school in apartheid South Africa and has supported the non-violent democratization in the post-Soviet states. In addition, Soros has pledged $100 million towards creating internet infrastructure for Russian universities and has given $50 million to the Millennium Promise, which aims to eradicate extreme poverty in South Africa.
Immortalized by Leonardo di Caprio in the movie Wolf of Wall Street, Jordan Belfort is considered one of the biggest villains in the financial industry for running a “boiler room” called Stratton Oakmont that marketed penny stocks and other pump-and-dump securities that cost a total of $200 million in losses to investors. Belfort was able to rake in millions in profits under this scheme, later on developing a lavish lifestyle that featured parties and the use of drugs.
Financial authorities cracked down on this scheme in the 90s, leading to the permanent shutdown of Stratton Oakmont in 1995. Belfort was indicted for securities fraud and money laundering, serving 22 months of a four-year sentence at the Taft Correctional Center in California.
Martin Shkreli was once known as the “Most Hated Man in America” for his unreasonable price hike on the drug Daraprim. He started off with a solid career in trading, specializing in the biotech sector, before greed took over and led him to raise the price of the antiparasitic drug by nearly 6,000% in Turing Pharmaceuticals.
In 2015, Shkreli was arrested by the FBI and charged with securities fraud for running a Ponzi-like scheme in his tenure at MSMB Capital Management. Prior to this, Shkreli was also ousted as the head of biotech firm Retrophin for improperly handling legal settlements.
Bernard Madoff is one of the first folks to come to mind when talking about Ponzi schemes, as he is known for operating one of the largest cases of financial fraud in US history. Madoff pleaded guilty to federal felonies in 2009 but it turns out he was already running the investment scheme as early as 1990. Some say this scheme was already in operation as far back as the 70s.
This Madoff investment scandal reportedly cost billions of dollars in investor money, with $65 billion still missing from clients’ accounts. The Securities Investor Protection Corporation estimated actual losses of $18 billion to investors. His firm, Bernard L. Madoff Investment Securities LLC, posed as a market maker that could bypass specialist firms by executing orders over the counter from retail brokers. As it turns out, Madoff was simply taking funds from new investors and enriching previous ones, including himself.
The FBI had already conducted multiple investigations into the firm but none proved conclusive until Madoff’s sons told authorities that their father confessed to running “one big lie” for their asset management firm. Madoff was sentenced to 150 years in prison on June 2009. His brother Peter, who served as the Senior Managing Director and Chief Compliance Officer of the firm, was sentenced to 10 years in prison. His son Mark committed suicide by hanging himself two years after his father’s arrest while Andrew died of lymphoma in 2014.