FBI special agent David Chaves spoke at an event called “The FBI on Wall Street”on Thursday evening.
The event was hosted by the New York Hedge Fund Round Table at the Penn Club of New York.
Since 2009, the FBI, the SEC, and the US Attorney’s Office have been massively cracking down on insider trading in the hedge fund industry.
“I want to talk you a little about this,” Chaves said during the talk, pulling up a slide called “Lie Detection.”
“Because in this industry, some people lie. Let’s face it. Right? And not that I’m going to make you all lie spotting experts tonight, ” he said.
He added that there are some traits you need to understand when you’re looking at people and trying to determine if they’re deceiving you.
Here are the traits:
- Liars will repeat a question verbatim
- Liars overemphasize their truthfulness: “To tell you the truth…” “Honestly…” “I swear.”
- Liars won’t use contractions in their denials: “Do not” instead of “Don’t”
- Liars lips disappear: It shows great anxiety and stress — a lie can follow
- Liars tend to adjust their tie or stroke their neck
- Watch for cheek or face touching, exhaling with puffed cheeks, rubbing forehead, playing with necklace
- Liars WILL make direct eye contact
- The deceivers native language is the lie!
Chaves said that it’s also important to have a baseline to know the person’s quirks too. And while you might not always be right, you should trust that gut feeling.
“You need to trust the visceral feeling you will get when you’re on the other side of the table talking ot someone and you know something is wrong and you can’t identify it,” he told the room of hedge funders.
He continued: “There will be a hair on the back of your neck, that uneasy feeling that you need to walk away and do a little more due diligence before you come back to the table. I’m telling you that sixth sense you have, you need to trust it when you view body language.”
Chaves told the group that when they’re doing a business deal, it’s important to do it face-to-face in order to avoid being deceived.
“You need to sit across from that person. It will change the way you do business.”