Ponzi Scheme

A Ponzi scheme is a fraudulent investment operation that pays returns to its investors from their own money or the money paid by subsequent investors, rather than from profit earned by the individual or organization running the operation. The Ponzi scheme usually entices new investors by offering higher returns than other investments, in the form of short-term returns that are either abnormally high or unusually consistent. Perpetuation of the high returns requires an ever-increasing flow of money from new investors to keep the scheme going.

Related: Pyramid Scheme, Asset Bubble http://en.wikipedia.org/wiki/Ponzi_scheme#Similar_schemes


Edited: |

blog comments powered by Disqus