The characters behind the major financial scandals that shook markets.

To innovate, to get rich, or to gain prestige — everyone had the ambition to go further, always to go further.

From the pioneering spirit of Baron Mauá to the billion-dollar scam of Daniel Vorcaro , passing through Naji Nahas, Bernie Madoff , Eike Batista , Elizabeth Holmes , and Sam Bankman-Fried : their trajectories reveal how audacity and overconfidence can be the driving force behind great achievements, but also resounding failures and, in some cases, financial scandals and fraud.

These are some of the fifteen characters from Adventurers and Thieves — Stories of those who shook or almost broke the market , by economist Roberto Teixeira da Costa and journalist Fábio Pahim Jr.

The book combines the authority of someone who helped structure the Brazilian capital market — Costa was the first president of the CVM (Brazilian Securities and Exchange Commission) — with the experience of a reporter specializing in covering the sector. The work also features a preface by Armínio Fraga , former president of the Central Bank , and an introduction by Alfredo Virgílio Setúbal , CEO of Itaúsa .

Adventurers and Thieves was born as an offshoot of Financial Crises: Brazil and the World (1929-2023) , published by the authors in 2023. "The warm reception to the book and the positive comments received encouraged us to seek the origin of those crises and the profile of the businessmen most directly involved in them," write Costa and Pahim Jr.

In investigating the history of major ruptures, the authors realized that, despite differences in time period, field of activity, and nationality, many of their characters shared behavioral patterns: excessive self-confidence, difficulty in recognizing limits, and the belief that temporary problems could be overcome.

On one side, there are the adventurers: entrepreneurs who took extraordinary risks, believing in the success of their ventures. On the other, the crooks: those who resorted to lies to preserve their businesses or simply to make a fortune in a dishonest way, causing enormous losses to the market.

“The difference between adventurers and swindlers is that the latter do not risk their own resources and only seek to enrich themselves at the expense of unsuspecting investors, since they manage to seduce people with reasonable discernment – which unfortunately continues to happen, more frequently than one might imagine,” explain Costa and Pahim Jr. Daniel Vorcaro and the Master bank scandal prove the continued relevance of the authors' thesis.

As Fraga notes in the preface, financial crises are part of market economies. Companies and investors make decisions in a permanent environment of risk and uncertainty, alternating between periods of euphoria and pessimism. When reality finally sets in, collapses, bankruptcies, and significant losses occur, he continues.

Faced with losses, some try to hide the true state of their businesses to preserve their reputation and maintain the trust of investors and creditors. In this process, promising businesses turn into scandals, with effects that extend beyond the companies themselves, threaten surrounding markets, and impact society as a whole.

The case of Eike Batista is used by the authors to show that, although the characters they cite share some characteristics, it is not possible to establish a single profile that identifies them.

Once one of the world's richest men, the founder of the EBX group ended up convicted of crimes including market manipulation, insider trading, and bribery.

"Eike can be seen as a visionary who envisioned spectacular projects for Brazil. Or as someone who lost almost everything because he promised shareholders what he didn't have, and therefore ended up in prison," write Costa and Pahim Jr. "Or even as someone capable of dedicating unimaginable efforts to emerge from one of the biggest disasters in Brazilian business history."

Prestige as a tool for fraud.

In the gallery of Costa and Pahim Jr., there are those who transform prestige into a tool for fraud. Bernie Madoff's pyramid scheme, for example, was only possible thanks to its creator's reputation as one of the most influential names on Wall Street .

The founder of a groundbreaking brokerage firm that helped propel the creation of Nasdaq , he built a respected career before using that credibility to conceal losses and sustain the largest Ponzi scheme ever uncovered. The fraud came to light with the 2008 financial crisis, which left an estimated $65 billion in losses and nearly 41,000 victims in 127 countries.

With 202 pages, the book costs R$ 89.90 (Photo: Portfolio-Penguin Publisher)

Another who tried to take advantage of his reputation as a financial genius was Sam Bankman-Fried, founder of FTX in 2019. One of the world's largest cryptocurrency exchanges before collapsing three years later, the American used customer deposits as a "personal piggy bank," as defined by the United States Justice Department.

However, not all the stories in the book involve concealing losses or sophisticated fraudulent schemes.

The Naji Nahas scandal in 1989 became a landmark event for the Brazilian stock market. Using a complex network of bank financing to support leveraged positions, it triggered a collapse that led to the temporary closure of trading floors, accelerated the decline of the Rio de Janeiro Stock Exchange, and spurred changes in the settlement and guarantee rules of the financial system.

Among the crises presented by Costa and Pahim Jr., some were born as crimes. The most notorious case is that of the Portuguese Artur Virgílio Alves Reis. In 1925, he counterfeited 200,000 500-escudo notes—an amount equivalent to up to 2.6% of the country's GDP. With the money, he created the Banco Angola e Metrópole to buy shares in the Bank of Portugal itself, in an attempt to give the fraud an appearance of legitimacy.

Discovered months later, Alves Reis was arrested, and the scandal shook confidence in the Portuguese financial system, exacerbating the political instability that would culminate in Salazar's dictatorship.

The presence of Baron Mauá on Costa and Pahim Jr.'s list helps explain that not all downfall stems from dishonesty. Irineu Evangelista de Sousa was one of the great symbols of Brazil's modernization in the 19th century, with investments in railroads, banks, navigation, and industries.

His downfall, however, resulted from a combination of excessive ambition, overconfidence in his own abilities, and an inadequate assessment of economic, political, and financial risks.

From another perspective, this same logic appears in the story of Jesse Livermore. Known for his genius in reading market behavior and making colossal bets against the trend, by betting on the New York Stock Exchange crash in 1929 , he profited US$100 million. Due to poor risk management, excessive leverage, and emotional instability, he went bankrupt four times. On the last occasion, he committed suicide.

By bringing together such distinct characters, Adventurers and Thieves shows that major financial scandals begin long before market or company collapses. They are born in the decisions of those who believe they can go beyond their own limits—and in what they do when reality sets in.