A Man in Prison for a $9 Million Ponzi Scheme on What He's Learned About Money and Greed
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Neal Goyal is a former hedge fund manager and founder of Blue Horizon Asset Management, LLC, and Caldera Advisors, LLC. In 2015, Goyal was sentenced to six years in federal prison for fraudulently obtaining more than $9 million in a Ponzi scheme. Goyal concealed his scheme by falsifying account statements and using investor money to fund his "extravagant lifestyle," according to the U.S. attorney’s office. Many of those duped investors were Goyal’s friends and family members.
You spend years busting your rear to make the dean’s list, trying to impress the Wall Street recruiters. You secure that all-important summer associate position following your junior year in college—and then you practically live at the office, poring over spreadsheets and pitch decks as your friends party the summer nights away.
And then it comes: the offer letter. A full-time position as a Goldman Sachs analyst or a trader at J.P. Morgan. You’ve finally landed a job at one of the big investment houses. The thought of moving up the financial industry ladder is now permanently emblazoned in your mind, with the vision of endless riches seemingly within reach.
That was me not so long ago. Now 36 years old, I have spent the past two years in federal prison, recounting the hideous choices and flawed thinking patterns that led me down this dark path.
It all comes down to greed. Launching a hedge fund at the age of 24, I was not the ordinary Wall Street kid. I was hungrier than most, tearing up that traditional offer letter so I could be my own boss—and pursue the fastest way to riches.
I was a rookie, but I wanted to be in the ring with the big boys. While I had a talent for investing and my early prospects were promising, there came a time in my fund's early years when I experienced my first quarterly loss. I looked at that loss as a representation of total failure. I believed the admission of such failure would hinder my dreams of becoming an overnight success.
Selfishly, I did the unthinkable: I manipulated the results reported to investors to hide those losses. What started as a small investing mistake later snowballed into a house of cards built on deception, eventually leading to nearly $10 million in losses to investors.
As a result of my actions, individuals lost their hard-earned savings, my family's life was completely unraveled, and the trust people had in me evaporated.
Since my incarceration in 2015, I have embarked upon a life-long commitment atone for my actions by educating others on ethics, moral behavior, and transparency, using the lessons from my past poor choices.
To all rookies aspiring to join the next generation of Wall Street's best and brightest: greed alone can kill those ambitions. Here are lessons to be mindful of when navigating an industry that will put your moral compass to the test—a test that I failed.
The grass is not always greener.
Desire for progress is a natural element of human nature, but on Wall Street this desire is amped to new heights. Even those young guns lucky enough to become an analyst at Goldman spend nearly every moment wondering where they want to go next. I did the same exact thing. Rather than living in the present, I spent 90% of my workday focusing on what I thought I needed. That chase led me to two things—lack of gratitude and a prison cell.
Money is not a measure for personal life success.
Just because money is the most significant measure of a deal's success doesn’t mean you should use it to measure your entire life. Too many people in the industry choose to evaluate their own self-worth this way. It’s a blunder I made, too. Rather than being proud of my entrepreneurial talent, I believed I was a failure for not being a millionaire before age 30. Instead of realizing that all my good decisions thus far had led me to having my own beautiful family, I focused on the quality of life I thought I needed to give them. I used money to measure my worth in every aspect of my life. So when I looked in the mirror as a young twentysomething, instead of seeing a man who was fortunate, I visualized dollar signs that would help me attain the reflection that I wanted to see.
Choose a labor of love; don’t labor for the love of money.
There is no question Wall Street can be an exciting place to work. As the financial epicenter of the world, the landscape changes relentlessly, making for no shortage of exhilaration. If this is how you feel, then Wall Street may be for you. The truth is, however, that the overwhelming majority of up-and-coming analysts hate their job. Nobody, no matter what they say, loves staring at a spreadsheet. What they love is the notion that staring at this financial model will eventually lead to — you guessed it, more money.
Greed can lead to a true money addiction.
There is nothing wrong with loving some extra dollars in your pocket. It really can make life easier in some ways. But greedy tendencies, without recognition, can lead someone into becoming a true money addict. Addicts will sacrifice anything and everything to satisfy their craving. They will compromise their morals and walk an ethical tightrope to get their fix. Every day, I realize that inmates all around me were addicted to money, too. It doesn’t matter if it was a drug crime or a white-collar crime—nearly all of them were chasing money at all costs.
My Message to Wall Street Rookies
Every single day, I think about the all the terrible choices that were fueled by my greed. I think about my firm's early years, when I started making choices that flirted with the gray area of moral behavior.
Initially, those choices were an effort to cover up a mistake or avoid embarrassment. Others around me were wildly successful, and I felt ashamed that I had not achieved that same level of success. As a result, my greed pushed me past that gray area, straight into the world of a criminal.
The whole time, I somehow believed I would get my firm back on track, and the problem would get "fixed" before it came to light. I believed that my investors would still make money at the end of the day. That was a complete, senseless delusion. I failed to acknowledge the true consequences of my greed. Had I even stopped for even a moment to picture what I could lose, I would have walked the straight line. But having not thought about those consequences, I lost everything. My greed clouded my view of what those consequences could be. So instead of foreseeing the potential strife my family would experience or the financial harm investors would suffer, I harnessed a grandiose illusion that all problems would be fixed with piles of money.
Growing up, I was raised with values that promoted honesty, hard work, ethics, and humility. But no matter how often this moral compass served as my guide for the first 25 years of my life, I allowed my inner greed to grow and wreck everything I had going for me.
Every kid on the Street will inevitably hit a time in their career where they are in a position to choose money over morals, or their ego over truth. But coming from a guy who had it all, the ruthless chase for that pot of gold will leave you with nothing, except isolation from those you love, a world that hates you, and without the treasure you were pursuing the most — money.