Investment Blog December Archive

Giant Ponzi Scheme

12/22/08 20:59

Pyramid or ponzi scheme is an investment fraud where the investors are promised with substantial profit from unknown sources but actually the funds will come from the next batch of investors. By the time that there would be no investor would like to invest the scheme would then collapse cause there is no real business which generates income. Lately, the all eyes are on Bernard L. Madoff Investment Securities (BMIS) for doing such fraud which ran about billion of assets from individuals and from financial giants like HSBC.

Link: Scam victims: Finance giants count losses - Dec. 15, 2008

Tips to Steer Clear Shady Advisers

Obama to appoint Mary Schapiro as SEC head

Democratic sources anonymously mentioned that President-elect will appoint long-time securities regulator Mary Schapiro to head his administration's Securities and Exchange Commission (SEC).

Her appointment is now critical at a time when investors lost some sense of trust in the agency after it had failed to alert investors about frauds like the $50 billion Ponzi scheme by money manager Bernard Madoff. Credibility is needed in the agency, and she might be the one who will put it back on track.

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The Real Charles Ponzi

The name of Charles Ponzi is, nowadays, directly equated to fraud, when in fact it is actually not like that.

His biographer claims that he is actually a dreamer without a good exit strategy. That might be true. Ponzi never thought at first that he will be involved in this kind of fraud. He just did not have a good financial analyst to criticize his business model.

Learn more about the real Charles Ponzi by reading this article from CNN.com

Link: Meet the real Ponzi behind the 'scheme' - Dec. 15, 2008

Bernard Mdoff's Ponzi Scheme

Bernard Mdoff, 70 and former Nasdaq chairman was arrested and charged with securities fraud for operating a billion dollars Ponzi scheme from his investment advisory business.

Two senior employees of Bernard L. Madoff Investment Securities, Madoff's firm, said the accused with the Securities and Exchange Commission gave advisory business that was served between 11 and 25 clients which had about $17.1 billion in total assets was a fraud, Madoff was finished and had absolutely had nothing and his advisories was just lies and was basically a giant Ponzi scheme.

If proven guilty, the accused faces maximum of 20 year in prison plus a $5 million fine.

Link: Former Nasdaq chairman charged with fraud - CNN.com