Making Do: The Use of Jurisdictional Schemas Among Venezuelan Victims of a Recent Ponzi Scheme

• In Event: 118 - Section on Economic Sociology Refereed Roundtable Session and Business Meeting
  In Refereed Roundtable 60min: Table 06. Cultural Analyses of the Economy

Abstract

Recent and prominent cases of financial fraud have revealed the jurisdictional basis of trustworthiness. Malfeasant firms are advantaged by the fact that unflattering information about their doings often must traverse numerous zones of authority—or jurisdictions—before reaching clients or investors. This paper takes up the jurisdictional basis of trustworthiness from the opposite end: that of defrauded investors. Specifically, it looks at the experiences of Venezuelan victims of the Stanford Financial Group fraud, a roughly $7 billion Ponzi scheme, centered on the sale of offshore certificates of deposit, that came to light in 2009. The data demonstrate how jurisdiction—here, Venezuelans’ embeddedness in a particular political and institutional culture—shaped investors’ behaviors in two main ways. First, Stanford’s Venezuelan victims were subject to locally specific forms of what I term “structural coercion,” which impelled them to want to invest in financial products in the first place. Second, in the absence of other tools or pathways for obtaining information about the firm, Venezuelans drew on a set of jurisdictionally specific folk schemas in order to interpret the firm and assess its probity.

Author

• Camilo Arturo Leslie, SUNY Buffalo