Ponzi scheme

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Related to Ponzi schemes: insider trading, Pyramid schemes, 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 the Ponzi scheme, this is very clever messaging that is promoted as the panacea for all our problems.
If the experience of other recent Ponzi scheme victims is anything to go by, then the chances are remote.
Generally, ponzi schemes are illegal money pooling activities wherein investors are lured with promises of high returns on investments in a short period.
In a Ponzi scheme, an institution attracts depositors by paying huge interest rates.
Hussein (2016) compares history's largest Ponzi Schemes by basing the size of each scam in 2015 dollars.
This book explains how Ponzi schemes operate: how they differ from pyramid schemes, Ponzi finance, and other financial arrangements; the schemes of Charles Ponzi, Bernie Madoff, and Allen Stanford.
Ponzi schemes usually collapse on themselves when new investments stop.
THE government has constituted a highpowered committee to recommend steps to strengthen the existing legislative and administrative framework for curbing the menace of Ponzi schemes.
The bench referred to its May 9 last year's order directing the agency to probe the duping of thousands of people of over Rs 10,000 crore through several ponzi schemes in West Bengal, Odisha and Assam.
Summary: In a bid to curb the menace of Ponzi schemes and protect investors, the Securities and Exchange Board of India (Sebi), which regulates the Indian capital market, has been granted more powers.
Established by Sergei Mavrodi, MMM was a Russian company that perpetrated one of the world's largest Ponzi schemes of all
In recent years, Ponzi schemes have captured national headlines and left a broad array of victims--often individual investors -- devastated by the scheme's aftermath.