Bad PR
With the press turning against him and the United States Attorney ordering an audit of the Securities Exchange Company, Charles Ponzi decided that it might be a good time to hire a publicist to assist in keeping his reputation in good health. William McMasters was taken on to perform this role but he didn’t like what he discovered. McMasters found several documents which exposed the “robbing Peter to pay Paul” practices of Ponzi’s business.
He also found Ponzi personally flawed, claiming that he was a “financial idiot” who lacked basic arithmetic. McMasters turned against Ponzi and agreed to sell his story to The Boston Post for $5000. On August 2, 1920, an article was published claiming that Ponzi was “hopelessly insolvent” and $4.5 million in debt – almost $60 million in modern money. Investors staged a second run on Ponzi’s offices forcing him to pay millions in a single day.
