it was charles ponzi who promised investors in the usa in 1920 that he would double their money in ninety days flat. those who fell for the temptation lost whatever they had invested.bernard madoff pulled off another ponzi scheme recently with far greater implications. the estimated fraud is in the region of $17 billion to $50 billion. the latter estimate is by his own admission. as if the blood on wall street that recently flowed was not enough,the recent revelation of the 'mother of frauds' has sent shockwaves all over the world and in particular among those unfortunate who believed in the suave and smart-talking madoff.
though how he worked his magic was puzzling to everyone,a steady annual return of 10-15% was too good to be ignored. a former chairman of nasdaq,he knew how money could be made and perhaps lost. his auditing firm was a three- man team-unseen and unheard of. banks like nomura had recently begun soliciting investors for madoff internationally. how much nomura itself lost is anybody's guess. many investors have lost all their savings excepting perhaps their properties while a charity lost its entire endowment.the legendary investor warren buffet had famously said that when the tide is down you really know how many people were swimming naked.
we too have seen many such ponzi schemes in india. and most mini madoffs have fled with their loot.i can understand when a layman falls prey to the lure of high interest. that well-informed and intelligent people and institutions should fall into such pits is incredible.
oh man,thy name is gullibility!
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