An super interesting story about Ponzi scheme within Ponzi schemes told by Mathew Cox. A Ponzi Scheme Matthew Cox Story.
Great to have you back, normally we focus on business, business growth and online marketing education, but we like a bit of entertainment from time to time as well.
It just so happens to be some entertainment any business owner can learn from. Ponzi Scheme Matthew Cox – a very interesting video indeed.
But before we get to the video below, how about a little education.
We want you to really understand this crazy story your about to hear – there are some hilarious bits in this Matthew Cox video as well.
You might remember him from American Greed: The Bonnie and Clyde of Mortgage Fraud.
What is a Ponzi scheme?
First you might wan’t to know what is a Ponzi scheme if your just one of our regular visitors.
Well let’s get straight to it.
A Ponzi scheme is an investment fraud that pays existing investors with funds collected from new investors. Ponzi scheme organizers often promise to invest your money and generate high returns with little or no risk. But in many Ponzi schemes, the fraudsters do not invest the money. Instead, they use it to pay those who invested earlier and may keep some for themselves.
With little or no legitimate earnings, Ponzi schemes require a constant flow of new money to survive. When it becomes hard to recruit new investors, or when large numbers of existing investors cash out, these schemes tend to collapse.
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Ponzi schemes are named after Charles Ponzi, who duped investors in the 1920s with a postage stamp speculation scheme.
Ponzi scheme “red flags”
Many Ponzi schemes will share these common characteristics. Look for some of these warning signs:
- High returns with little or no risk. Every investment carries some degree of risk, and investments yielding higher returns typically involve more risk. Be highly suspicious of any “guaranteed” investment opportunity. That’s one of the reasons when your marketing online you must provide disclaimers and be up front about risk.
- Returns are to consistent. Real investments tend to go up and down over time. So you should be very skeptical about an investment that regularly generates positive returns regardless of overall market conditions.
- Unregistered investments. Ponzi schemes typically involve investments that are not registered with the SEC or with state regulators. Registration is uber important because it provides investors with access to information about the company’s management, products, services, and finances.
- Unlicensed sellers. Federal and state securities laws require investment professionals and firms to be licensed or registered. Most Ponzi schemes involve unlicensed individuals or unregistered firms which should be a dead give away and easy to detect with a little due diligence.
- Secretive, very complex strategies. You should avoid investments if you don’t understand them or can’t get clear details about them.
- Issues with paperwork. Account statement errors may be a sign that funds are not being invested as promised. Another red flag!
- Difficulty receiving payments. Be suspicious if you don’t receive a payment or have difficulty cashing out. Ponzi scheme promoters sometimes try to prevent participants from cashing out by offering even higher returns for staying put. Most likely because they have some money to move around.
One of the largest Ponzi schemes was executed by Benri Madoff.
Who is Berni Madoff?
Bernard Lawrence “Bernie” Madoff was an American financier who executed the largest Ponzi scheme in history, defrauding a massive amount of investors out of tens of billions of dollars over the course of at least 17 years or so, and more than likely longer.
He was also a pioneer in electronic trading and chairman of the Nasdaq in the early 1990s.
Despite claiming to generate large, steady returns through an investing strategy called the split-strike conversion, which is an actual trading strategy, Madoff simply deposited the clients funds into a single bank account that he used to pay existing clients who wanted to cash out.
He funded redemption’s by attracting new investors and their cash, but was unable to keep up the fraud when the market turned very sharply for the worst in late 2008.
This is what probably pushed him to confess to his sons—who worked at his firm but, he claims, were not aware of the scheme—on Dec. 10, 2008.
They turned him in to the authorities the next day. The fund’s last statements indicated it had $64.8 billion in client assets.
That’s a bunch of chedda….wouldn’t you agree?
In 2009, at age 71, Madoff pleaded guilty to 11 federal felony counts, including securities fraud, wire fraud, mail fraud, perjury, and money laundering.
The Ponzi scheme became a prime example of the culture of greed and dishonesty that, to critics, pervaded Wall Street, remember the financial crisis?
Madoff was sentenced to 150 years in prison and ordered to give up $170 million in assets, but no other guys on his level faced legal problems after the crisis.
Whats up with the video on the $500 Million Ponzi Scheme?
Well as promised this amazing story about a $500 Million Ponzi scheme is presented for you in video below.
Even though Mathew Cox is an admitted an convicted con man himself. His magnetism is undeniable. Chech out the video below about a Ponzi scheme wrappred up in a bigger scheme.
You might want to bookmark this page if you don’t have the time because this is a very long and interesting story.
Enjoy!
Ponzi Scheme Matthew Cox
If you made it to the end Congrats.
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