By Courtney Werning
Since Bernie Madoff became a household name for his immense Ponzi scheme that cost investors an estimated $17 billion, these schemes are quietly unfolding in every part of the country at astounding rates. Instead of Madoff's 150-year sentence in federal lockup becoming a deterrent, it seems as though his widely-known fraud has ignited a distressing amount of new Ponzi schemes.
According to a recent New York Times article, state and federal financial regulators say a new Ponzi scheme operator is found nearly every week, and legal actions are brought against about 100 schemes every year. In May alone, at least nine newly discovered Ponzi schemes were claimed to involve more than $96 million. On the state level, Ponzi schemes were the third-most-frequent source of state enforcement actions in 2012, according to the most recent totals from the North America Securities Administrators Association.
Dirk Cotton, a financial planner and blogger, has three simple rules that could save you from financial devastation at the hands of investment fraud:
- Never believe that you can make lots of money while taking little risk;
- Never give custody of your funds to anyone except a trusted, well-known national financial firm. In other words, never write a check directly to the financial advisor or one of his/her companies; and
- Don't let anyone convince you that you're getting in on something special and exclusive.
Watch as Attorney Dave Meyer explains more about Ponzi schemes.
As the catastrophic losses suffered by the varied investors defrauded in the Madoff Ponzi scheme illustrate, victims can include anyone: individual investors, retirees, small businesses, corporations, pension funds and institutional investors. With over fifty years of combined legal experience, and having successfully represented approximately 1,000 investors, the securities arbitration and litigation lawyers at Meyer Wilson have the expertise necessary to aggressively pursue investors' claims against the promoters of Ponzi schemes.