|
Md Hasin Israq, Hasibul Hasan  Cover Design: Farha Tasneem Introduction
The occasional occurrence of financial scandals and scams is a fact of life in business and investing. Many of these scandals have been brought on by the excessive greed of a few individuals, whose actions had devastating repercussions that took down whole businesses and impacted millions of people. In this blog, we shall learn about seven such cases when persons or businesses first accumulated wealth by deceit but were eventually exposed. Great Ponzi Scheme Charles Ponzi inspired the name of the Ponzi scheme. Ponzi devised a scheme to exchange worldwide reply coupons (IRC in short) in 1919. These coupons can be used to purchase postage stamps. He thought it was possible to purchase IRCs at a discount rate in Europe and then swap them at face value in America. Arbitrage was the method, and it wasn't even forbidden. He initially went to friends and described the technique to them; some of them decided to invest because of the fantastic interest rate. He assured them that they would get 50% profit in 45 days. He also made returns. Ponzi used the funds obtained from the more recent investors to repay the primary investors. The plan continued longer as almost everyone reinvested their money.
5 Comments
|
