<< Notre Dame, Vietnam, Dr. Kumar, Lam Dong, the European Fashion House, and the many others — along with astute KBLB investors — thankfully see the forward-looking statements for what they are. >>
That is a major tenet of many successful penny stock scams (eg, Theranos, Bernie Madoff's Ponzi Scheme, the Enron Scandal, etc) and is sometimes called The Credibility Halo Effect:
When someone sees that highly accomplished and respected individuals are associated with a company, they assume a certain level of due diligence has been done. The logic goes something like this:
- "If Henry Kissinger and George Shultz are on the board, this company must be legitimate."
- "These are not people who would risk their reputations on a frivolous or fraudulent venture."
- "They must have access to information that I don't, so I can trust their judgment."
This "credibility halo" gives the fraud a powerful layer of protection. It allows the company to bypass the normal skepticism and rigorous questioning that a startup would typically face. Investors and the public alike are more willing to believe the company's fantastic claims because of the caliber of its associates.
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