SEC Cracks Down On Ponzi Schemes Promising Safe Investment Returns

SEC Cracks Down On Ponzi Schemes Promising Safe Investment Returns

by Julie Jason on Jan 26, 2019

Ponzi schemes, fraud, scams, investing for retirement, investing, IRAs

We’ve all heard about Ponzi schemers like Bernie Madoff who successfully convinced people to part with their hard-earned money with offers of consistently outsized returns.

You have to wonder how someone could be taken in by such fraudsters. But it continues to happen even to people who aren’t trying to beat the market.

That’s the kind of offer that creates interest. Thousands of everyday people were lured into in a "massive" $1.22 billion nationwide Ponzi scheme.

The scheme affected 8,400 investors, 2,600 of whom "invested" through their Individual Retirement Accounts.

The Hook

The allure was simple: A safe and secure promissory note paying 5-8% interest.

According to the August 2018 U.S. Securities and Exchange Commission (SEC) complaint, “[i]nvestors were unquestionably motivated by the high rate of returns that the [defendant] offered and investors viewed these as passive investments generating safe returns.” 

Read my full article on Forbes.com.