Posted in Blog on March 7, 2017
Ponzi schemes are frequently in the news and for good reason. Ponzi schemes often result in significant investment fraud that impacts many people’s lives.
What is a Ponzi scheme? It is a type of investment fraud that involves current investors being paid returns with money obtained from new investors. These schemes often include promises of high returns from investing in a legitimate business. The reality of what is happening is very different. Instead of actually using the money from investors to invest in a company, those funds are used to pay other investors, creating the illusion that investors are getting a profit.
Know the warning signs
Ponzi schemes result in victims losing their investments because it was never actually invested in anything. What can you do to protect yourself? Educate yourself about your investments and look out for these Ponzi scheme warning signs:
Many schemes fall apart when they are unable to keep a steady flow of money from new investors to pay their current investors. If you believe you have been the victim of a Ponzi scheme, report your concerns to the SEC. You should also contact an attorney to help you learn about your rights and to see what legal options are available to recover your financial losses.