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 ?
Like in the Ponzi scheme, because of being positioned in the top hierarchies, they become the largest beneficiaries.
The Ponzi scheme she said ordinarily collapses as fast as they are created while leaving its investors behind, unable to recoup their investments.
Ponzi scheme is defined as an investment program that offers impossibly high returns and pays investors using the money contributed by other investors.
Heera Ponzi scheme victims welcome charge sheet against CEO
In 2009, investors in R Allen Stanford's financial company found that the company was running a ponzi scheme and that their investments were worthless.
'We therefore wish to notify the investing public that the operation of this investment scheme has no tangible business model hence it's a Ponzi scheme, where returns are paid from other people's invested sum.
"Ford Graham and his wife allegedly used their social connections in the affluent Princeton community to lure investors into a Ponzi scheme that financed the defendants' posh lifestyle of country clubs, private schools, and tropical vacations," Grewal said in the Tuesday statement.
The trial addressed the interaction of the MUFTA with the factual context of a Ponzi scheme, said Jackson.
21, following a tip from Trading Jam - a local consumer advocacy group that alerted the police about a possible violation of Poland's laws - the district public prosecutor's office in Warsaw approved a criminal investigation into the DasCoin Ponzi scheme.
TAGBILARAN CITY - A father and son tandem was arrested on Tuesday in Cebu City for syndicated estafa after they were tagged in a P10 million Ponzi scheme and victimized several Bohol-based investors.
In a nutshell, a Ponzi scheme is a financial arrangement where the Ponzi operator, without a legitimate underlying business, makes payments to past investors with funds collected from new investors.
The commission fined the San Antonio Democrat for failing to properly disclose on his personal financial statement income related to FourWinds Logistics, the Ponzi scheme that got him into legal trouble last year.