PONZI WHERE IS MY MONEY
PONZI WHERE IS MY MONEY
To begin with, Section 67(1) of the investment and securities Act (ISA), 2007 states clearly that:?
“No person shall make any invitation to the public to acquire or dispose of any securities of a body corporate or to deposit money with any Body Corporate for a fixed period or payable at call"
The birth of any company legally is usually delivered by The Corporate Affairs Commission. The Securities and Exchange Commission regulates any company that seeks to take cash from the public for investments, savings, trading securities & exchange. Now ALL SEC REGULATED COMPANIES HAVE CAC REGISTRATION, BUT NOT ALL CAC REGISTERED COMPANIES HAVE SEC REGULATIONS.
Any entity, not registered by SEC (Even if registered by CAC) that takes money from individuals, or corporate bodies, to save, invest, and/or trade is therefore acting ILLEGALLY. Can a firm be registered by SEC and operate fraudulently? Absolutely Yes, SEC does not confer perfection, but it filters many illegal schemes. A firm can be approved by SEC, and still fail or run failed investment schemes. So check if the firm is licensed by SEC and if the product offering is also approved by SEC? Two key questions.
Verify if a firm is registered by SEC
https://sec.gov.ng/cmos/
PONZI DEY CRAZE??
Before we examine what Ponzi is, let us consider
WHO “HE” IS/WAS.
His name is Charles, a postal swindler in the 1920s. There are debates as to whether he started the scheme. The first recorded instances of Ponzi investment schemes can be traced back to Adele Spitzeder and Sarah Howe in the mid-to-late 1800s, but they didn’t get the naming right, lol. So yeah, our guy is Charles Ponzi. He engaged in a type of exchange called arbitrage, that allowed a mail sender to pre-purchase postage and include it in their correspondence. The mail recipient would now take the coupon to a local post office and exchange it for the priority airmail postage stamps needed to send a reply. This wasn’t his Ponzi, His Ponzi started when his company, Securities Exchange Company (SEC), guaranteed returns of 50% in 45 days or 100% in 90 days to the general public. And because he had a successful track record in the postage stamp scheme, investors were automatically drawn in.
Now hold this in your left hand “Ponzi schemes rely on a constant flow of new investments to continue to provide returns to older investors, any break in this chain results in a systemic failure”.
So, rather than investing the money, to make profits, Charles simply redistributed the funds, giving the funds of new investors as profit to old investors, and repeating the circle, eventually, the chain broke, he ran out of investors and ran into $3,000,000 debts.
???Investopedia defines a Ponzi scheme as an Investment Fraud?in which clients are promised a large profit at little to no risk. Companies that engage in a Ponzi scheme don't have any generic value creation, rather, they focus all of their energy on attracting new clients to make investments. The investment from new clients are used to pay existing clients their periodic return on investments.
BY THEIR “ROOT” YOU SHALL KNOW THEM
These schemes vary by company, product & offer, nonetheless, their roots stay the same. No matter how they disguise themselves, they will exhibit one or more of the following:
1.???It is either they have not been registered by SEC, or their registration is “ongoing”. In some cases, they are not even registered by CAC.
2.???The offering always guarantees high returns within shorter periods with little or no risks.
3.???Their products always yield a consistent flow of returns regardless of the market, sector, or economy.
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4.???The strategies for achieving 2 & 3 above are secrets or powered by A.I, Demons, and/or Angels, so they can't show their workings even if you demand for it
5.???If 1-4 has been noticed, and you still somehow find yourself inside, the final straw will be that capital or investment sum will be impossible to retrieve wholly, even with legal steps in most cases.
Others may include an alluring company/product name, please don’t ever fall for a fine name, don’t even consider a name not fine, imagine being duped by a firm named “Poyoyo”. An MOU, a postdated Cheque, a fully furnished office in an accessible location, the flamboyancy of their directors and/or other staff members, etc.
You can check if that investment company is SEC-registered here.
DO THE NEEDFUL, STOP THE VIRUS
?Ponzi Schemes thrive like viruses, they spread rapidly, and their carriers are usually family, friends, and close associates. They are most likely the ones to inform you about "this new investment company", they got the virus from somewhere else, and pass it to you. For the benefit of the doubt, we can say largely say the virus spreads due to ignorance, but in reality, it is greed.
?Just like how the spread of a virus can be halted by doing the needful, so can a Ponzi scheme be halted from causing a large-scale disaster.
?What is the needful?
1.????Due diligence: Verify registration by SEC, CAC, etc. History, value offering, etc.
2.????Emotions in your pocket: Do not accept an investment because it was introduced to you by your religious leader, parent, friend, or spouse until you have exhausted your due diligence.
3.????Overcome greed please always look at the rates: Carry out your due diligence, pocket your excitements, anxieties & sentiments, don't be in a hurry to triple your fund in a short while. If “It is too good to be true, you are probably right, don’t be greedy, remember the world is big enough for every man’s need, not every man’s greed
4.??Be safe and seek professional financial advice: Acknowledging you are a novice or don't have sufficient knowledge about a field doesn't make you dumb or stupid, the best thing to do would be to seek professional guidance, yes it might cost you some amount, but trust me, ignorance is costlier.
CONCLUSION
Even though i am a financial expert, or well at least i know the basics, i have lost roughly around $5k within 2 years. I can say for sure that the new variants of Ponzi don't look like Ponzis, they come as saint, and if you do not carefully lift the veil, you will most likely be entrapped.
The effect of Ponzi Schemes is really devastating, usually, the people who benefit are the early joiners, and those coming in later will be the collateral damage. Note that Ponzi schemes thrive on a constant flow of new investments to continue to provide returns to older investors, for this to be achieved, they always develop effective marketing strategies, so they will sound convincing, they will be very persuasive until they get you on their platform, my advice, FLEE, not run, not hide, don't think about it, make sure you FLEE first.
If you have never been scammed into a Ponzi scheme, I really salute you. For those of us that have hit the rock bottom of Ponzi schemes, YOU ARE NOT STUPID for falling for those schemes, you just made a wrong decision. This article has shown us how & why we fell. So from here on, we should Go and Sin no more.
POST SCRIPT:
Even if an investment scheme is legitimate & regulated, please DO NOT INVEST ALL YOUR LIFE SAVINGS.