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What is a Ponzi Scheme?
Lured by the promise of profits, initial investors send money to a fund manager who appears to be legitimate.
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What is a Ponzi Scheme?
As subsequent investors send money to the fund manager…
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What is a Ponzi Scheme?
…the fund manager uses some of that money to pay fake dividends to the initial investors, making it look like a legitimate and profitable investment.
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What is a Ponzi Scheme?
Misled by the fund’s reported earnings, other victims soon invest in the fund as well.
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What is a Ponzi Scheme?
The manager keeps his fraud going by paying fake dividends to previous investors with money from new investors — all the while earning commissions and fees from each new investment.
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Fund ManagerFund Manager
What is a Ponzi Scheme?
Eventually the fund manager disappears with all the money, or the scheme collapses when he can no longer keep up the charade. Either way, most investors lose nearly everything.
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