Ponzi Scheme

What is a Ponzi Scheme?
Lured by the promise of profits, initial investors send money to a fund manager who appears to be legitimate.
Fund Manager

As subsequent investors send money to the fund manager…
Investors Fund Manager

… the fund manager uses some of that money to pay fake dividends to the initial investors, making it look like a legitimate and profitable investment.
Investors Investors

Misled by the fund’s reported earnings, other victims soon invest in the fund as well.
Fund Manager Investors Investors

The manager keeps his fraud going by paying fake dividends to previous investors with money from new investors — all the while earning commissions and fees from each new investment.
Investors Investors Investors Investors

Eventually the fund manager disappears with all the money, or the scheme collapses when he can no longer keep up the charade. Either way, most investors lose nearly everything.
Fund Manager Investors Investors Investors Investors

Ponzi Scheme

by ralphmon on Feb 24, 2009

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Ponzi Scheme — Presentation Transcript