THE LOW-DOWN ON PONZI SCHEMES

Finweek English Edition - - INSIGHT -

A so-called Ponzi scheme is a de­ceit­ful in­vest­ment ac­tiv­ity in which an op­er­a­tor or or­gan­i­sa­tion pays re­turns to its in­vestors from new cap­i­tal pro­vided to the op­er­a­tor by new in­vestors, rather than pay­ing the re­turns from profit earned. Ponzi schemers, of­ten charis­matic in­di­vid­u­als, typ­i­cally tar­get in­ex­pe­ri­enced in­vestors and can in the process rob them of mil­lions. Fin­week looks at some ex­am­ples of how these schemes work and how they gained no­to­ri­ety in the early 1900s.

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