June 1994, Part 2 of 2, Fraud Terminology Topics
Blue Sky Laws, Prudent Man Rule, Red Herring,
Palm Off, Buy a Pig in a Poke, Fiddler, Enigma, Xenophobia, Paralegal, Fall On Deaf Ears,
and Nip in the Bud.
 

Generally, a paralegal may not offer
legal advice to clients.
 

Fraud In Other Words™
Professional Jargon and Uncensored Street Slang
by Larry C. Adams, CFE, CPA, CIA, CISA

 

Paralegal
A person with legal skills, but who is not an attorney, and who works under the supervision of a lawyer or who is otherwise authorized by law to use those legal skills. In many states, a paralegal cannot solicit business for a law firm and may not be used to take a deposition. Often, a paralegal cannot be paid by a lawyer on a fixed fee or sliding scale basis that is directly related to the recovery. Paralegals may be used for a variety of services such as developing legal forms; directing factual investigations; interviewing witnesses; drafting notices of claims, notices of injury, and letters of representation; preparing subpoenas; calculating benefits and damages; researching laws; or preparing factual synopses for informal hearings. Generally, a paralegal may not offer legal advice to clients.

 

Buy a Pig in a Poke
To purchase something sight unseen and to risk disappointment. The phrase describes an ancient dishonest practice of putting a worthless cat in a bag or poke, instead of a young suckling pig, which was considered an expensive delicacy.

 

Blue Sky Laws
A common name for a variety of state laws protecting the public against securities fraud. The term is said to have been used by a judge who described certain speculative stocks as having no more value than a few feet of blue sky. Each state has its own securities distribution restrictions and guidelines which must be met by each issue offered in the state. The laws were intended to protect the public from buying stocks in fly-by-night operations, visionary oil wells, distant gold mines, nonexistent research, unproven medical cures, and other schemes.

 

Prudent Man Rule
A standard of conduct that requires a fiduciary to discharge his or her duties with care, discretion, intelligence, skill, prudence, and diligence under the circumstances then prevailing that a prudent man acting in a like capacity and familiar with such matters would use in the conduct of an enterprise of a like character with like aims.

 

Red Herring
1. A preliminary prospectus giving the advance details of an expected offering of corporate securities, subject to amendment, with the sale contingent upon clearance by the Securities and Exchange Commission (SEC). The prospectus is called a red herring because it has a disclaimer printed in red.
2. A diversionary tactic. A false or deliberately misleading trail. Strong-smelling smoked herring was used as a lure to train hunting dogs to follow a scent. The herring also could be used to throw the dogs off the scent.

 

Palm Off
To pass off fraudulently. The expression describes the practice of concealing in the palm of your hand what you pretend to dispose of in some other way.

 

Fall on Deaf Ears
To be disregarded. This fifteenth century term refers to something a person does not want to hear, such as a reproach, blame, or advice. The person reacts as though he was physically unable to hear it.

 

Fiddler
A sharper. A cheat. A constant schemer. A contriver. A falsifier of expenses.

 

Enigma
An unsolvable puzzle. A baffling and inexplicable situation or person. An obscure riddle. An encrypted code or cipher. A problem that is difficult to crack.

 

Xenophobia
An unreasonable fear, contempt or hatred of foreigners or strangers or something that is strange or foreign (especially in politically or cultural views).

 

Nip in the Bud
To stop something before it can develop further. This is a sixteenth century analogy to an early spring frost that kills off flower buds.

 

ã Copyright 1994 Larry C. Adams. All rights reserved.
“Fraud In Other Words” is a trademark of Larry C. Adams.
 

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