Large-scale financial fraud thrives on investor indifference to how returns are achieved.

Evidence

Madoff ran his operation for a long time without a large cadre of smart money manipulators wielding intricate financial instruments. This was a readily detectable fraud. However, Madoff’s brother, who oversaw the compliance program, circumvented regulators by filing phony documents and fraudulent tax returns (Lattman & Protess, 2012). The banks and prospective investors who flocked to Bernard Madoff seemed more interested in his high returns than in how he achieved them. — Albert Bandura, Moral Disengagement, 1453

Categorization

• XREF: Connects to the moral disengagement theme of willful ignorance and to how institutions enable fraud through disinterest in mechanisms — parallels the Enron/Andersen case just above in the same chapter.