Business ScamsBy Matthew Peveler

What is a scam/fraud?

A fraud is defined as something that is an intentional deception made for personal gain or to damage another individual

The rise of free market and lack of regulation helps people perpetrate these crimes

One of the most famous is the Ponzi Scheme

Ponzi Scheme?! One of the more common scams

It is perpetrated based on confidence tricks and fancy jargon that confuses layman

While the returns happen initially (and the scheme grows in popularity), returns will stop and the scheme will eventually collapse at some point

Charles Ponzi He figured out a flaw in the “International Reply Coupon” system

Using money he made from that, he got people to invest in his idea on a wild guaranteed return

As scheme grew, more suspicion of him grew as well

His scheme finally crashed in the year of 1920

Nick Leeson

Caused the crash of Baring's Bank, the oldest bank in the UK

He had no formal training as a financial trader, yet he still acted as one

He made a fortune in Singapore markets based on the lack of regulation

His luck soon turned sour however and he went into a tailspin

He was arrested in 1995

Bernard Madoff

Via a combination of poor regulation and a well set-up Ponzi scheme, he made millions

Harry Markopolos had complained about Madoff back in 1999

Due to the major market recession that happened in 2008, his scheme collapsed

He was arrested in December of 2008

In Conclusion

Schemes are run based on free markets and lack of regulation for the most part

Using confusing financial jargon which is generally meaningless, the perperators reel in investors

While most schemes crumble under their own weight, it still causes massive financial damage to all involved