Regulators are going crazy over Ponzi schemes. One regulatory agency has reportedly found 19 Ponzi schemes so far this year, and says that hundreds of reported investment schemes are currently being investigated across America.
Why are all these schemes coming to light? It probably has less to do with the media coverage of Bernie Madoff's scheme, and more to do with the economy. The tough financial climate has caused a lot of people to want to cash out their investments. Cashing out is difficult to do in a Ponzi scheme because the heart of this type of scam is a constant influx of cash. When investors try to cash out (especially if many of them want to do it at once) a Ponzi scheme is likely to be uncovered.New words are being created to describe the frenzy surrounding the search for Ponzi schemes, including Ponzimonium and Ponzipalooza.
Consumers are right to be skeptical of their investments. The good economy and the ever-rising stock market helped cover many investment schemes. People from all walks of life got involved with bad investments. Protect yourself from investment schemes by asking the right questions about the investment, and when in doubt, walk away. If you think something might be wrong, don't take the risk with your money.
What Is Your Risk Tolerance?
Answer the question "What type of investor am I?".View Course »