Criminal Deception in Silicon Valley

A new academic paper examines how entrepreneurs in Silicon Valley commit fraud, and the research is highlighted on the security blog Schneier on Security. The study analyzed court cases from two thousand to twenty twenty-three, finding that fraudsters engage in what it calls 'façading' — constructing and maintaining a fake image of high growth to hide poor performance. The paper identifies three levels of deception, from surface to deep, depending on how far reality falls short of expectations. It also suggests practical steps like expanding SEC surveillance and whistleblower programs, and reforming investor due diligence to help detect and deter such deception.

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