FIFA scandal should serve as warning
June 4, 2015
Last week a scandal erupted in the world’s most popular sport. We can all learn a lesson from this.
There are allegations that the Fédération Internationale de Football Association is nothing more than a sporting criminal enterprise. If this proves to be true in the court of law, heads will roll.
In Canada, we refer to football as soccer. Authorities in Switzerland and the United States last week referred to the powerful role of the controlling world organization of soccer as criminal. FIFA is in deep trouble.
Crime focuses on one thing. Money! Criminals through their criminal activity want to seize money that rightfully does not belong to them.
While last week’s bombshell happened in the world of sports there can be similarities to criminal activities that have occurred in the investment business since the beginning of time.
Often we hear how hundreds and sometimes thousands of investors have their investment assets stolen by criminals that have infiltrated the investment business. Yes, bad things happen including with investments.
Bernie Madoff got his share of publicity for stealing $65- billion (U.S.) from thousands of clients. Most investment thefts are not as sensational but for victims who have their assets stolen the result is the same. Their money disappears.
Sometimes in life when bad things happen, it motivates us to be proactive and to take measures to improve the way we live and manage our life. We suggest you use the FIFA scandal to motivate you to look for potential risks within your financial assets.
Apparently the alleged allegations with FIFA have been going on for decades. The first time I suspected something had gone foul was when the World Cup for the year 2022 was awarded to Qatar.
The Qatar temperature in the summer can be as high as 122 degrees Fahrenheit and not only is that dangerously high for the athletes, I’m not sure how many soccer fans would want to endure the sweltering heat just to witness a sporting event.
Something did not seem right. There seemed to be no logic to this decision. How could this have happened?
Authorities are suggesting this is just another example of how decades of criminal activity have awarded the World Cup to those countries that would pay bribes to FIFA officials that documents say are in the hundreds of millions of dollars.
At the end of this legal process that will likely take years to resolve many will ask why action was not taken sooner when there were so many tell-tale signs that something had gone amok.
Draw a parallel to your own personal finances. If in the future you found that you had been swindled would you look back and admit there were warning signals that in hindsight you should have acted on sooner?
Our suggestion is do not wait until something bad happens, but anticipate what areas of your financial wealth are potentially at risk. Call this your “governance audit.”
Here are a few things to consider. Is your financial advisor registered with a regulatory body that oversees how their business is conducted?
A regulating body will have a strict oversight process that monitors the sale of financial products with the objective of protecting all investors. The vast majority of financial scams, including Bernie Madoff’s, occur when the criminal is not a member of such a regulatory body.
Be suspicious of all investments that you own. Are these investments regulated like mutual funds or are you the owner of any private unregulated investments?
Unregulated investments don’t always fail; however, there is no regulatory oversight that helps protect the investor’s interest. This adds additional risk to that investment and that risk should be evaluated on an ongoing basis.
Finally, we recommend you trust your instincts. Many victims of theft can look back and remember they had an uneasy feeling. Again, trust your instincts.
Use the FIFA scandal to motivate you to check for any weaknesses within your own financial affairs. Are you a