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What Is A Ponzi Scheme?
By Admin | August 8, 2009
A Ponzi scheme, named after Charles Ponzi who made a successful criminal career in the 1920s by defrauding thousands of people, is a financial or investment fraud that uses money or make profits from assets of new investors to pay off old investors. Ponzi used this method to pay investors fifty percent on short-term investments that he acquired from new investors and personally gained tremendously.
Ponzi schemes unfortunately have continued to operate until to date. Individuals invest bulks of their money on high-risk investments hoping to cash in on higher returns. Identifying such frauds may not be easy but one should do extensive research on companies before deciding to make an investment. Predicting a fraudulent individual may be difficult, but one should observe the person’s, body language and speech, indication from the individual of a risk-free venture and if the individual is reluctant to volunteer certain information that you request.
Topics: Finance, Investments | No Comments »