Ponzi scheme


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Related to Ponzi scheme: hedge fund, MMM, pyramid scheme, Bernie Madoff

Ponzi scheme

A fraudulent investment scheme. Investors are promised very high returns by the promoter. The original investors often realize these high returns because their payouts are funded by cash from new investors. New investors' cash is used to pay out the original investors. The investors' funds are usually not applied to the stated purpose. However, the reported high returns attract additional inflows of capital used to pay out subsequent investors. The scheme fails when the payouts to existing investors and/or redemption requests exceed new investor inflows.

Ponzi scheme

See pyramid.
References in periodicals archive ?
Awareness and prosecution of investor fraud and Ponzi schemes also have risen in recent years following several high-profile matters, and the firm has significant experience in assisting victims who suffer such losses.
Madoff was arrested on 12 December, 2008, for his Ponzi scheme valued at $64.
Judge Jacqueline Nguyen of the US District Court for the Central District of California issued a restraining order freezing Neman's assets and shutting down his Ponzi scheme in April 2012.
The former directors and officers of Stanford's operations include three executives convicted of furthering the Ponzi scheme.
Such a provision is critical, as a Ponzi scheme by its nature is concealed for as long as possible, which in turn hampers investigative efforts once the scheme is uncovered.
I had certainly never tried to interview victimized investors in a Ponzi scheme.
Later that year, it was discovered that the person he had been investing with was running a Ponzi scheme.
Last year, he announced the new project, MMM-2011, by stating boldly that it would be another Ponzi scheme.
The Ponzi book; a legal resource for unraveling Ponzi schemes.
Bernard Madoff 's $20 billion long-running Ponzi scheme received widespread coverage, and while the magnitude and duration of Madoff 's scam are mind-boggling, he certainly isn't the first to perpetrate this type of investment fraud.
Rick Perry claims that Social Security is "set up like an illegal Ponzi scheme.
AT THE REPUBLICAN presidential debate in Tampa on September 12, Mitt Romney said Rick Perry had needlessly "scared seniors" by calling Social Security "a Ponzi scheme.