Posts Tagged ‘ Ponzi schemes ’

How Did Madoff Go Bad?

November 3, 2009
How Did Madoff Go Bad?

Last Friday, the SEC published the exhibits for Investigation of Failure of the SEC to Uncover Bernard Madoff’s Ponzi Scheme (Report No. OIG-509). That was 536 separate exhibits tying to fill in the background on what happened with the SEC and Madoff. The one that caught my eye was exhibit 104 that summarized a June...
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You’re a Victim of a Ponzi Scheme, But What About Your State Taxes?

June 11, 2009
You’re a Victim of a Ponzi Scheme, But What About Your State Taxes?

You missed the warning signs and got suckered into a Ponzi scheme. The IRS offered some tax relief for long-term Ponzi scheme investors (like some of the Madoff victims) who have paid taxes on gains from the investment. The IRS clarified the federal tax law governing the treatment of losses in Ponzi...
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Arthur Nadel Indicted

April 29, 2009
Arthur Nadel Indicted

Florida fund manager Arthur Nadel was indicted Tuesday on criminal charges for allegedly soliciting hundreds of millions of dollars in investor money under false pretenses and misappropriating client funds. Mr. Nadel, 76 years old, was charged in a 15-count indictment with mail fraud, securities fraud and wire fraud. “It’s a much more complex story than...
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Bits and Pieces on Compliance

March 28, 2009

Here are a few stories and items that caught my eye this week, but I have not had time to build-out to a full post: SEC Speaks on Compliance Issues to Investment Advisers by Joel Beck of BD Law Blog Lori Richards, the Director of the SEC’s Office of Compliance Inspections and Examinations (OCIE) spoke on...
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Ponzimonium, Ponzipalooza, Ponzimania

March 27, 2009
Ponzimonium, Ponzipalooza, Ponzimania

There is “rampant Ponzimonium.” Or is there a “virtual Ponzipalooza”? Bart Chilton, a commissioner at the Commodities Futures Trading Commission coined these terms in his speech on March 20 before American Bar Association’s Committee on Derivatives and Futures Law Students. Personally, I prefer Ponzimania. The CFTC has filed charges against 15 alleged Ponzi schemes so far this...
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SEC Settlements in Ponzi Scheme Cases: Putting Madoff and Stanford in Context

March 23, 2009
SEC Settlements in Ponzi Scheme Cases: Putting Madoff and Stanford in Context

In the last six and half years the Securities and Exchange Commission has reached settlements with over 300 defendants in cases related to alleged Ponzi schemes. NERA Consulting has been tracking these SEC settlements since the Sarbanes-Oxley Act was enacted in July 2002. In that time frame there have been 12 Ponzi scheme settlements that...
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You’re a Victim of a Ponzi Scheme, But What About Your Taxes?

March 18, 2009
You’re a Victim of a Ponzi Scheme, But What About Your Taxes?

You missed the warning signs and got suckered into a Ponzi scheme. Can the IRS help by giving you some tax relief? This is a critical issue for long-term Ponzi scheme investors (like some of the Madoff victims) who have paid taxes on gains from the investment. After all, they have been paying real...
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Can You Prevent Ponzi Schemes?

March 18, 2009
Can You Prevent Ponzi Schemes?

With Madoff, Nadel and Stanford in the news, people are wondering why the government does not prevent Ponzi schemes. The government should protect us from these frauds. How can they? Ponzi scheme sponsors are thieves. Common criminals. They just wear suits instead of black masks. The government has not been able to prevent bank robberies, car-jackings or...
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Irrational Exuberance

January 13, 2009
Irrational Exuberance

In an essay in the Wall Street Journal, Stephen Greenspan explains some of the psychology behind the success of Ponzi schemes: Why We Keep Falling For Financial Scams. The basic mechanism explaining the success of Ponzi schemes is the tendency of humans to model their actions — especially when dealing with matters they don’t fully...
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Gullibility

January 13, 2009

NPR’s Science Friday has an interesting broadcast on Gullibility. Ira Flatow interview Stephen Greenspan, author of Annals of Gullibility: Why We Get Duped and How to Avoid It. Can science explain why some swindles are so successful? Why are some people more likely to try to buy the Brooklyn Bridge or send money to the...
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