*(TLDR: why rational people are often easily fooled. See below comments on the Robert Cialdini whom the author references)*
Could You Be Fooled by a Ponzi Scheme? You’d Better Believe It - wsj
https://www.wsj.com/finance/investing/could-you-be-fooled-by-a-ponzi-scheme-youd-better-believe-it-e159c87
Jason Zweig
By Jason Zweig
June 30, 2026 at 9:55 am ET
Fellow investors,
If it’s too good to be true, why do people believe it it’s true?
“Because they’re either greedy or stupid.” That’s the most frequent take I hear about anybody who falls for an investment scam—including the victims of Paul Regan, the subject of my most recent article. He is a convicted Ponzi schemer who recorded himself ripping investors off so he could teach his salespeople how to do it, too.
That take couldn’t be more wrong. These victims aren’t greedy or stupid; they’re vulnerable. I spoke with close to two dozen of Regan’s investors. Almost none were young, employed and in robust health. Most were disabled or chronically ill; unemployed or retired; widowed; or living alone. When life hasn’t gone your way for years, an investment that’s too good to be true feels like the answer to your prayers. You don’t evaluate it as savings; you evaluate it as salvation.
This exchange of comments on the Regan story nails it:
*Lyndon Bradish*
*6 hours ago*
*What I find amazing is the amounts that ‘investors’ are willing to forward to an unknown person promising great returns.*
*Why do they have such great sums of money to invest and no sense to protect their hard won funds?*
*I guess greed and desperate needs with gullibility are the drivers?*
*Reply · Share*
*Alberta S*
*6 hours ago*
*Hopefully you will never find yourself old, alone, sitting by the telephone and waiting for it to ring.*
*Reply · 1 · Share*
*Lyndon Bradish*
*6 hours ago*
*Valid point that I missed. Thanks.*
*Reply · Share*
What’s more, Regan’s methods closely parallel the principles outlined in the classic book “Influence: The Psychology of Persuasion,” by behavioral scientist Robert Cialdini.
At my request, Cialdini listened to several of the recordings Regan made.
“We like those who give to us, who provide hope, who offer ways out of distress,” Cialdini said after hearing a recording of Regan telling one woman that he could “come through for you and be your deliverance.”
“He’s presenting himself as her benefactor, not just her business partner,” explained Cialdini. “In effect, as the recipient of his gratitude, it’s her turn to give back and say yes to his request.” In another form of reciprocity, Regan often adjusted his offerings while he was talking to clients, promising them higher rates or longer terms if they invested more or committed sooner.
Speaking in his soft, deep voice, Regan variously—and falsely—claimed that he had been a top trader at Goldman Sachs, had run Citigroup’s alternative-investments division, was a chartered financial analyst and had earned a degree in “advanced mathematics.”
“Especially when people are uncertain,” Cialdini told me, “they go for authority, gravitating to the person with confidence and credentials.”
Regan also swayed investors with what Cialdini calls “social proof,” namedropping influential-sounding people or institutions. The California Teachers Federal Credit Union was a major investor, Regan claimed. “They came in with 46 million \[dollars\] and they applied tremendous due diligence,” he said on one call.
There is no credit union by that name.
Regan took elemental signals of trustworthiness that seldom steer people wrong and used them to create a powerful impression that he was honest and caring. “These principles that \[the investors are\] responding to are deeply embedded in us,” said Cialdini, “and normally give us good outcomes.”
To have confidence in someone literally means to place your faith in them (from the Latin fidere, to trust or believe). A con artist is someone whose craft is to win your trust. That’s most likely to happen not because you’re stupid or greedy, but because you’re vulnerable—and because the con artist knows exactly how to fabricate trustworthiness.
The best advice I can give?
First, don’t assume you’re too sophisticated to be suckered. In the 1990s, John Bennett and his New Era Philanthropy, a Ponzi scheme, bilked an ex-U.S. Secretary of the Treasury, a former co-chairman of Goldman Sachs and other financial titans out of hundreds of millions of dollars. Later, Bernie Madoff scammed billions from many of Wall Street’s leading institutions.
Second, as Ronald Reagan put it, “Trust but verify.” No matter how likable or trustworthy someone seems, check their credentials independently. Don’t let your gut feelings prevent you from doing a background check—and a check into the financial logic of the investment.