Interesting piece in the weekend edition of Montreal’s The Gazette about Carlo Ponzi (sometimes referred to as Charles Ponzi) and his connection to the Quebec city.
By now – thanks to Bernie Madoff – how a Ponzi scheme works is well known: It takes money from new investors to pay existing investors. There’s no real investment to generate returns. It’s a fraud that works only as long as new money keeps flowing in, but sooner or later it is doomed to fail or be revealed as redemptions or payouts outstrip new investments.
Well, it appears that Ponzi moved from Boston to Montreal as a young man and it was here that he was introduced to the swindle that would later bear his name. On the heels of Canada Day, it s not a Canadian connection to take pride in.
Last week, we published new research that found 43% of people surveyed did not understand the trade-off between risk and return, which is a basic market principle – the higher an investment’s rate of return, the higher the risk. We know that no risk, guaranteed investments promising high returns are commonly offered by scam artists. […]
A BC Securities Commission panel issued a decision regarding the BC based ‘Manna scheme’ in August 2009. The ‘Manna scheme’ was a Ponzi fraud that cost investors losses totaling more than US$10-million. In this scheme, 800+ investors deposited around $16 million and only received $3-5.6 million back. There is little hope of recovering the rest. Educating yourself on […]