Scamming Folks Using Ponzi Schemes
THE SCAMMING OF AMERICA THROUGH FINANCIAL FRAUD
Step # 1 Watch the two (2) YouTube videos from the links posted below:
Step # 2 Using only the Write Submission link on Blackboard, please answer the following questions (clearly number each response)
(1) So, exactly what is a Ponzi scheme?
(2) Why did relatively smart and successful people fall for this deceptive “Ponzi” hoax?
(3) Why did Bernard Madoff get involved in this swindle?
(4) Do you think that, given an opportunity, that you too would have invested with Madoff?
(5) Should all those individuals who profited from this scam be forced to repay all of their profits? Explain.
(6) Did the SEC (the government watchdog) drop the ball and overlook Madoff’s chicanery?
IMPORTANT: What three (3) things did you learn as a result of watching these videos and also completing this assignment?
Scamming Folks Using Ponzi Schemes
Student’s Name
Institutional Affiliation
Scamming Folks Using Ponzi Schemes
1 So, exactly what is a Ponzi scheme?
A Ponzi scheme is a type of investment scam in which existing investors use the funds contributed by new investors to pay themselves. A Ponzi scheme is different from a legitimate business organization in terms of its avenues for gaining profits (De Saeger, 2015). While legitimate businesses focus on trading goods or services for profits, Ponzi schemes rely on the investments of new investors to enrich the existing investors. The schemes operate to convince new investors that the organizations own assets from which they trade for profitability (De Saeger, 2015). As long as there is a steady influx of new investors, Ponzi schemes stay financially sound.
2 Why did relatively smart and successful people fall for this deceptive “Ponzi” hoax?
Ponzi schemes showcase some strategies that help them to attract different people including