05-18-2024, 04:20 PM
Ponzi schemes promise high returns with little or no risk, relying on funds from new investors to pay returns to earlier ones. Signs of a Ponzi scheme include consistent returns regardless of market conditions, overly secretive or complex strategies, and difficulty withdrawing funds. For instance, Bernie Madoff's investment firm promised steady returns but collapsed when it couldn't sustain payouts. Investors should scrutinize investment opportunities, prioritize transparency, and verify credentials to avoid such schemes.