What's the difference between a Ponzi scheme and a pyramid scheme?
With the current prevalence of the
Ponzi scheme across the nation, the terms "Ponzi scheme" and "pyramid
scheme" are often used interchangeably. There is a shade of difference
between the two, however. In a classic pyramid scheme, you generally pay
into an offer that claims you can make money for yourself by recruiting
others into the scheme. Usually, those recruits will then pay their portion
to you, and so on.
Watch as Attorney Dave Meyer explains more about Ponzi schemes.
Learn more about the aftermath of a Ponzi scheme by reading
Attorney David Meyer's post for the American Bar Association.
You end up paying into a pyramid scheme with hopes of a greater return
when you find more recruits. In a Ponzi scheme, although the structure
seems very similar, you aren't usually required to do any more work
than just handing over money to be invested. This is part of what makes
the Ponzi scheme so effective. You usually aren't aware of the need
for additional recruits to keep the scam rolling, and you don't have
to work for it, either. The Ponzi schemer takes your money and promises
to do all the work for you, and they're often long gone before you
even realize what's happened.
If you have been the victim of a Ponzi scheme and have questions about
FINRA mediation, arbitration, or litigation, call the respected securities
fraud attorneys with Meyer Wilson today. By calling you will be able to
meet with one of our experienced FINRA lawyers in a FREE consultation.