IIA-Australia Factsheet - Ponzi and Pyramid Schemes

https://iia.org.au/wp-content/uploads/2022/12/Factsheet-–-Ponzi-and-Pyramid-Schemes-2022.pdf

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Author

IIA-Australia

Date

2022

Topics Explored

Risk Management

Format

Factsheet

Extract/Description

This factsheet includes advice on how not to get caught by Ponzi or Illegal Pyramid Schemes.

Key Points

    1. A Ponzi scheme is where the scheme operators claim to offer an investment opportunity, but there is little or no commercial activity – it is an illegal business practice in which new investors’ money is used to make payments to earlier investors.
    2. An illegal pyramid scheme is where the bulk of participants’ earnings are dependent on recruiting new participants to progress through a range of levels.

Relevant Industries

All

Level of Assumed Knowledge

Intermediate