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Home >Industry >Banking >Why Ponzi schemes never go out of fashion

Why Ponzi schemes never go out of fashion

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Bernie Madoff, who died last week in prison, where he was serving a 150-year sentence, was perhaps the most successful Ponzi operator of all time.

  • Despite high-profile collapses, pyramid schemes continue to proliferate. What are the warning signs for investors?
  • Madoff’s demise is only the latest reminder of this ever-present, dark underbelly of finance. There are some key characteristics to these schemes, which hint at what to watch out for

MUMBAI : If I was a writer with aspirations of serving up a web-streaming series, here’s the storyline that I would propose. It’s the mid-1920s. After a crippling pandemic, the United States is seeing the kind of prosperity that it has never seen before. The financial markets are rallying. There’s a lot of easy money going around. In this environment, Bernie Madoff travels back in time and meets Charles Ponzi. Both get together to run the biggest Ponzi scheme of all time and so the story goes.

Madoff, who died last week in prison, where he was serving a 150-year sentence, has of course never met Ponzi, given that they lived in different eras. Ponzi died in 1949. But Madoff was perhaps Ponzi’s most successful disciple ever. He, unlike Ponzi, ran a Ponzi scheme for many years.

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