A bigger risk than GameStop? Failing Ponzi schemes ring alarm bells for Wall Street
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By Paul Sullivan
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The GameStop stock saga with its element of David versus Goliath, not to mention its head-turning price gains followed by stomach-churning drops may have been all the talk of Wall Street in the last couple of weeks.
But that is just a sideshow.
Ponzi schemes are collapsing while financial markets are soaring, concerning legal and market experts.
Credit:AP
A bigger issue for investors may well be the increasing number of Ponzi schemes, which use money from new investors to pay earlier investors until the fraud falls apart. Many of the latest fraudsters have been preying on people who feel they lost out on the big stock market gains of last few years. The schemes have failed because they did not have the sophisticated apparatus of two of the biggest in the
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Almost everybody is waiting to see the end of 2020, the year when a virus brought our lives to a grinding halt. People lost lives, livelihoods and struggled to cope with unforeseen challenges. While the economy slowed down drastically, the Indian stock market seemed to cock a snook at the virulent virus. The Sensex soared from 41,253 on 31 December 2019 to 47,613 on 29 December 2020, giving a 15.4% return to those who made the right bets or simply sat still with their quality stocks.Â
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As people worked from home and discovered interest rates on bank term deposits sliding to a miserable 5.5%, they turned to the stock market in droves. Both depositories now report over 20 million depository participant (DP) accounts each the NSDL 20.7 million and CDSL 27.8 million. Even accounting for the fact that many investors have multiple DP accounts, over 1 million new accounts were added every month since the lock-down.Â
State appoints Regional Commissioner to compile status of ponzi cases
Updated:
Updated:
This is after RBI identified and sought action against 118 finance firms
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This is after RBI identified and sought action against 118 finance firms
In a bid to protect the depositors’ interest in Ponzi schemes run by financial companies, against whom cases have been registered, and monitor cases pending in various courts, the State government on Saturday appointed Bengaluru Regional Commissioner to compile the status of all cases that have been filed in the State and coordinate with the district administration.
The finance companies running ponzi schemes could dupe investors completely and if movable and immovable properties belonging to these companies are not attached, there is a possibility that investors’ interest cannot be protected since these properties could be sold, the government said in its proceedings appointing the Regional Commissioner. Since this action agains