Illustration by Jeremy Leung/II
Illustration by Jeremy Leung/II

This content is from: Culture

The Down Under Scammer You’ve Probably Never Heard of

A look inside the mind of Australia’s most notorious insider trader

Absurdly — or maybe not — convicted Ponzi schemer Bernie Madoff is campaigning to have President Donald Trump slash his 150-year prison sentence. And sadly — for some, if certainly not all — Jeffrey Epstein, the financier whose vast wealth is a source of much suspicion, is dead.

As such, it’s worth revisiting Australia’s singularly tragic version of both men: the bipolar insider trader Rene Rivkin, who after being sentenced to just nine months of weekend detention stints, sparking national gloating, killed himself in 2005. 

“Cell, cell, cell,” the lead story in The Sydney Morning Herald crowed. 

If he had lived, however, Rivkin might have served more time. For one thing, he was also a suspect in a seamy murder case and the recipient of a lavish insurance payout under suspicious circumstances. And he allegedly offloaded stocks that his newsletter, the Rivkin Report, tipped. Last, despite having untold wealth hidden in the Swiss banking system, Rivkin owed the taxman millions. 

His memory still casts a tailored shadow across the Australian investment landscape, because the “guru of greed” was such an epic character: a high-octane, cigar-smoking, Prozac-popping Sydney-sider dubbed “Australia’s most aggressive broker.” Some even labeled him messianic based on his grandiose claims of persecution, going so far as to compare his criminal conviction to the crucifixion of Jesus. 

The China-born Australian’s first public deviation from legality occurred in February 2001, according to the Morning Herald, when the private banking boss at Switzerland’s Leumi Bank was arrested for embezzlement. “An inquiry began that eventually brought Rivkin’s Swiss banking details out in the open. By the end of that month, Rivkin had sold his most substantial key assets: the luxury cars, the apartments dotted around Sydney, the Embassy nightclub in Double Bay. He used the sale of his mansion as an excuse to sell his art collection.” 

Later that year the Australian investments commission charged Rivkin with insider trading for buying 50,000 Qantas Airways shares after chatting to the head of the aptly named, now-defunct Impulse Airlines. In 2003 Impulse founder Gerry McGowan testified to having told Rivkin that Australia’s flying flag carrier planned to buy his company.

In one of many plot twists, Rivkin’s mischief yielded a piddling profit. Nonetheless, Justice Anthony Whealy denied clemency.

“It must be said that throughout his trial the offender displayed an attitude of contemptuous arrogance for the processes which had brought him to trial,” Justice Whealy said in May 2003.

Sentenced to detention, the disgraced trader killed himself two years later, on May 1, 2005, leaving A$18 million ($12.2 million) in unpaid taxes.

Additionally, Rivkin was implicated in an insurance fraud case: the 1993 fire that destroyed Sydney printing plant Offset Alpine, of which he was the board chairman.

A fruitless decade-long investigation followed, fueled by suspicion the plant had been torched for the A$53 million payout. The new-for-old policy took effect just two months before the incident. Even more convenient, the windfall goosed Offset Alpine’s share price.

Another twist in the Rivkin saga is the legacy of the Sharon Tate–like model Caroline Byrne. The same fateful year as the fire, after missing work and an appointment with her psychiatrist, Byrne was found at the foot of the Sydney cliff formation bleakly called the Gap. 

In 2008, after two inquests and a complex investigation, Byrne’s boyfriend, Gordon Wood — who served as Rivkin’s chauffeur and minder — was convicted of homicide. Alleging a “full-blown conspiracy,” Byrne’s father fingered Rivkin, alleging he was Wood’s lover too and that Caroline had known the fixer’s intimate business secrets.

Wood was sent to Sydney’s Goulburn jail, only for the conviction to be overturned in 2012, but litigation rumbled on. Last August, despite having successfully settled some related media defamation cases, Wood lost his A$20 million malicious prosecution lawsuit against New South Wales, Sydney’s parent state.



What drove Rivkin, Wood’s troubled boss? Jan Marshall, a scam victim advocate and educator and the chief executive of Life After Scams, says: “People start off with small risks, and as they pay off, they begin to think they are invincible. They are driven by their greed to take bigger and bigger risks.”

Almost certainly, Marshall adds, Rivkin had a sociopathic streak. That means no conscience and no concern for how others might be affected by his acts, she explains.

Hong Kong–based Dr. Anthony Dickinson, an expert on workplace psychopaths, also believes Rivkin to have been a sociopath. Unlike full-blown psychopaths, sociopaths have some empathy, he notes. 

“But their sense of right and wrong is based upon the norms and expectations of their subculture,” says the neuroscience-trained psychologist.

As to why Rivkin risked all on Impulse Airlines, Dickinson suggests: “Classic case of the gambler’s fallacy” — the myth that winning streaks are inevitable. Or, more likely, Rivkin was just “upscaling” business-as-usual practices, assuming he would never be caught or could buy his way out if he was.

The medicated maverick’s upward mood swings would have made him optimistic and prone to engage in risk-taking behavior, Dickinson explains. During downs, Rivkin would have been lethargic, non-gregarious, or worse.

“One well-known and well-documented side effect of Prozac is its promotion of self-harm and suicidal ideation,” Dickinson says. 

Fraud usually doesn’t lead to suicide, though, because it is often embedded in a conspiracy, he notes. Corporate crime rarely features just one person — a Who’s Who of suspects participate, Dickinson says.

“Comparisons of oneself with a messianic or godlike omnipotent being are surprisingly common amongst psychiatric in-patient populations — and carry a diagnosis of delusions of grandeur.”

Dickinson adds that a perk of the malaise is that it lures disciples; Rivkin’s messiah complex probably fueled the belief that he did nothing wrong.

James Pollard, insights manager for Nudge Global, a financial education organization, offers a more mundane reason that Rivkin-style traders gamble on a fast buck: “Because the perceived risk is quite small.” 

Pollard cites an Australian study that found that, of 1,859 transactions, a quarter had abnormal trading patterns. Of those, only 5 percent prompted litigation.

“With figures like this,” Pollard says, “individuals who are prone to committing crime may see others doing it around them and feel that they may as well join them, if others aren’t being caught. Once someone has committed one crime and gotten away with it, they may then commit more. There is also an element that there is no identifiable victim in this. No one will be harmed by one person acting corruptly, and the payoffs are so large, why wouldn’t you commit a crime?”

Proven underlying white-collar drivers include hedonism and vanity, Pollard says — traits associated with Rivkin, who was branded “flamboyant.”

Pollard also mentions low self-control: “People like this may well value the here and now over the long term.” 

Yet, he says, rogue traders are often highly conscientious and competent. “People who get away with white-collar crime and fraud have to be good at it to be in a position to profit from it.”

Whereas Rivkin was dubbed a business genius, Madoff had an image as a Wall Street seer with special market smarts. Leadership consultant Barry Maher, whose client list includes Wells Fargo and the American Bar Association, notes two key distinctions between the crooks. The first, Maher says, is scale. 

“Madoff’s crime was far larger. But far more significantly, Rivkin’s crimes were hidden, committed in secrecy. Bernie Madoff’s were not only done in public, where they should have been easily spotted, he was held up as an investment genius by other experts who certainly should have known better. They gave him money — they allowed him to pontificate on TV shows and in print,” Maher explains.

As for how many other Rivkins might be covertly gaming the system, former FBI agent Chip Massey, who served on task forces tackling insider trading, quotes a well-known film: “The phrase from the movie Jaws comes to mind . . . ‘We’re gonna need a bigger boat.’”

Insider trading is without a doubt a huge problem, he says.  “Anytime you have the temptation of quick and easy money without doing much to get it, you will have a certain percentage of people who will be drawn to that. What would go through your mind if you saw an armored truck parked with its doors open and no guards in sight? Exactly,” Massey adds.

His advice to anyone thinking of doing a Rivkin — pursuing insider trading — boils down to five words: “It won’t make you rich.”  

Many insider trading convicts have little to show for the price paid post-sentencing, he notes. Rivkin netted only a pittance.

Sydney-based financial adviser Kyle Frost summarizes Rivkin’s career as “a terribly sad story of mental illness.” 

There will never be another Aussie Gordon Gecko like him, partly because of the fall of the stockbroker, Frost asserts, pointing to the rise in technology that enables investors to access markets and trade shares through the same instant information flow.

The truth is that the analog rogue had little to gain by bending the law, Frost says. He quotes Warren Buffett: “‘Rational people don’t risk what they have and need for what they don’t have and don’t need.’”