system available.
Q. Were clients going to be told about this trading system?
A. Yes, they would be.
Q. What — was there a decision made about what type detail was going to be provided to them about the trading system?
A. That would be a system that does involve day-trading and invests all the funds in stocks.
Q. What — when you say “all the funds,” what funds were supposed to be invested in the stock market?
A. Any incoming client funds that were designated as such for that type of trading.
Q. And were funds that were designated as such put in a particular account?
A. Yes, they were.
Q. And what account was that?
A. They would have been put into Pinnacle’s bank account and, ultimately, broker’s account.
Q. So prior to early 2002, you said that Pinnacle was not involved in money management?
A. That is correct.
Q. But after early 2002, was Pinnacle involved in money management?
A. Yes, it was.
Q. And based on your discussion with Mr. Noel, what were clients told about how those Pinnacle funds were going to be managed after early 2002?
A. Those investors would have been told that they were being used for a relatively rapid day-trading system and that all of those funds would be invested in the stock market.
Q. Now, who was going to be out there promoting this program to clients?
A. That would have been Bryan Noel and the other sales staff.
Q. And was the other sales staff told about the trading program as well?
A. Yes, they were.
Now, we have discovered that the source for the stock trading tributary was Alex and not Bryan Noel. Alex was the one who “had an interest in the markets.” It was Alex who “told” Noel about the stock trading system that he had helped to developed in college. It was Alex that “took over the management of” Noel’s personal account. Verbs are telling in that they show action or state of being. Alex:
Had an interest
Told Noel
Took over
Acting upon his market interest, Alex approached Noel and told him of his stock trading system.
As a result of that conversation, Alex took over. From Noel’s relatively small, personal investment, the trickle grew significantly into a raging river of investors’ money that ultimately evaporated, leaving over one hundred people high and dry.
ELEMENT THREE: RATIONALIZATION
“Rationalization” can be defined, “To ascribe one’s acts to causes that superficially seem reasonable and valid but that actually are unrelated to the true, possibly unconscious and often less creditable or agreeable causes” (Dictionary.com).
In Shakespeare’s tragedy Othello , there is a forceful example of rationalization. Othello had murdered his wife, Desdemona, as well as his loyal friend, Cassio. He committed these murders in an act of (unwarranted) jealousy. In the play, Lodovico asks the following:
“O thou Othello, thou wert once so good,
Fall’n in the practise of a damned slave,
What shall be said to thee?”
Othello replies:
“Why, any thing:
An honourable murderer, if you will;
For nought I did in hate, but all in honour”
The act of rationalization allowed Othello to attribute what he had done as an act of honor rather than a needless reaction of a jealous husband. Honor “seemed reasonable and valid,” whereas the more truthful “suspicion and distrust” lacked the nobility of the former.
While Alex was testifying, a question opened the door, allowing Alex to articulate his rationalization for his fraudulent behavior.
Q. What was going on in 2003 that would cause you to do something like this?
A. There were many circumstances in 2003, especially the latter part of the year where I had a bad breakup with an ex-girlfriend and I started drinking heavily, started smoking marijuana at some points from 2003 to 2004, and also even engaging in sexual activity at that time that I was hiding from my parents. Hiding many of those things from my parents.
As with Othello, our analysis of Alex’s words is most revealing. First,
Q. Were clients going to be told about this trading system?
A. Yes, they would be.
Q. What — was there a decision made about what type detail was going to be provided to them about the trading system?
A. That would be a system that does involve day-trading and invests all the funds in stocks.
Q. What — when you say “all the funds,” what funds were supposed to be invested in the stock market?
A. Any incoming client funds that were designated as such for that type of trading.
Q. And were funds that were designated as such put in a particular account?
A. Yes, they were.
Q. And what account was that?
A. They would have been put into Pinnacle’s bank account and, ultimately, broker’s account.
Q. So prior to early 2002, you said that Pinnacle was not involved in money management?
A. That is correct.
Q. But after early 2002, was Pinnacle involved in money management?
A. Yes, it was.
Q. And based on your discussion with Mr. Noel, what were clients told about how those Pinnacle funds were going to be managed after early 2002?
A. Those investors would have been told that they were being used for a relatively rapid day-trading system and that all of those funds would be invested in the stock market.
Q. Now, who was going to be out there promoting this program to clients?
A. That would have been Bryan Noel and the other sales staff.
Q. And was the other sales staff told about the trading program as well?
A. Yes, they were.
Now, we have discovered that the source for the stock trading tributary was Alex and not Bryan Noel. Alex was the one who “had an interest in the markets.” It was Alex who “told” Noel about the stock trading system that he had helped to developed in college. It was Alex that “took over the management of” Noel’s personal account. Verbs are telling in that they show action or state of being. Alex:
Had an interest
Told Noel
Took over
Acting upon his market interest, Alex approached Noel and told him of his stock trading system.
As a result of that conversation, Alex took over. From Noel’s relatively small, personal investment, the trickle grew significantly into a raging river of investors’ money that ultimately evaporated, leaving over one hundred people high and dry.
ELEMENT THREE: RATIONALIZATION
“Rationalization” can be defined, “To ascribe one’s acts to causes that superficially seem reasonable and valid but that actually are unrelated to the true, possibly unconscious and often less creditable or agreeable causes” (Dictionary.com).
In Shakespeare’s tragedy Othello , there is a forceful example of rationalization. Othello had murdered his wife, Desdemona, as well as his loyal friend, Cassio. He committed these murders in an act of (unwarranted) jealousy. In the play, Lodovico asks the following:
“O thou Othello, thou wert once so good,
Fall’n in the practise of a damned slave,
What shall be said to thee?”
Othello replies:
“Why, any thing:
An honourable murderer, if you will;
For nought I did in hate, but all in honour”
The act of rationalization allowed Othello to attribute what he had done as an act of honor rather than a needless reaction of a jealous husband. Honor “seemed reasonable and valid,” whereas the more truthful “suspicion and distrust” lacked the nobility of the former.
While Alex was testifying, a question opened the door, allowing Alex to articulate his rationalization for his fraudulent behavior.
Q. What was going on in 2003 that would cause you to do something like this?
A. There were many circumstances in 2003, especially the latter part of the year where I had a bad breakup with an ex-girlfriend and I started drinking heavily, started smoking marijuana at some points from 2003 to 2004, and also even engaging in sexual activity at that time that I was hiding from my parents. Hiding many of those things from my parents.
As with Othello, our analysis of Alex’s words is most revealing. First,
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