What is a Ponzi scheme?
A Ponzi scheme is a fraud named after Charles Ponzi who perpetrated his fraud during the 1920’s. Another famous perpetrator in recent years is Bernard Madoff in the US.
A Ponzi scheme is a fraudulent investment scheme offering very high returns to investors over a short period. After people invest returns are paid to separate investors not from profits earned but usually from money invested by new investors. The new investors pay the old investors and so the word spreads. At this stage there are no financial losers. Even the investors who do not lose out could still be considered victims of this fraud. This is due to the fact that they probably would not have invested had they known the whole truth of the investment.
Many people are unaware that a fraud can be charged even if there is no financial loss to anybody. Eventually the scheme usually collapses and the scheme originator disappears along with all the investments. Often these schemes are stopped by regulators long before a collapse of this nature due to the fact the promoter is often selling unregistered securities.
Accused of Ponzi fraud
If you are accused of this fraud you are likely to be involved in financial services and as such your reputation is vital to you. Even if no criminal charges are brought it may trigger other sanctions if the Financial Conduct Authority (FCA) starts an investigation. You need to have a expert in financial services with experience in this very niche area.
Our experienced team of serious fraud lawyers has the expertise and knowledge to look at the required level of detail to defend you. Contact our expert fraud solicitors on 0203 816 9274 or complete our online enquiry form.