Ponzi schemes usually collapse after weeks, months at best...

>be rich and famous stockbroker
>have many rich, famous, powerful friends
>tell them you will give them a great deal and huge return rate if they invest with him
>friends give him tons of money
>move money around to make it look like it's being well invested
>fleece more people into giving you money by showing how much money you've "made" in investing by creating false records of how much money other clients had given you
>if someone wants to cash out you have a large enough money base to pay them out and make it seem they got a huge return of investment
>eventually get thousands of people to give you billions of dollars

Madoff is a guy who became rich and quite famous as a stock broker. He pioneered many techniques that are today essential on all stock markets, including electronic trade. Some of his actions/methods were questionable, but hey no one says that the stock market is clean. By 1980s Madoff rose from a penniless nobody into a sort of NY stock market guru. For a time he was a chairman of Nasdaq and stuffed many important positions with his friends and relatives.

In the meantime Madoff opened an investment company. He claimed to invest his clients' money into various stocks. In reality he put all the money on his private bank account. Each month each client received a fraudulent receipt showing how his money is doing. And almost each time the money was growing. Thanks to his fame he raised a shit load of money from various charities, banks and rich fucks. He set up a policy of "no return". Once you pulled out your money, you won't be ever able to return to his firm. And because Madoff was so great in multiplying money, few got out. Most of clients instead poured even more money in. The scheme was going for decades and collapsed only because the crash of 2008 happened.

Cont.

Best of all, some whistleblowers already in 1990s warned that Madoff's numbers don't add up. It was mathematically impossible to get the returns he claimed to have.

However no one reacted, including the feds. The clients were also undeterred. It was either the magic of Madoff's name or simply the fact that people didn't want to know what kind of stock fraud Madoff is doing as long as he had his juicy returns.

Like said, he defrauded Jewish charities who were naive enough to trust him.

Thanks bros

Honestly it sounds like he used his celebrity to his advantage and was very effective in fundraising/sales. The policy of not being able to leave and come back is brilliant. I guess the fraud is that the return came from other contributions while he said it came from the market.

I think if he had been a little less ambitious in terms of what returns he promised his clients he could have continued undeterred. Most people arent sophisticated enough to really know whats going on in their mutual funds. They know they need to save, maybe 15% in yheir 401k and 5.5k in their roth, but they dont really understand the intricacies of the market. They just give it to a fund manager and forget about it. Plus the no return policy increased switching costs... people were scared to get out because they werent sure they could find another money manager that could promise (and produce) that much alpha return

Nick Leeson embezzled unfathomable amounts of money from the bank that he worked for, and then tried to invest it. The plan was pretty simple. Steal the money, invest it, then when you start making returns on the investments, you put replace the money you stole before anybody notices that it was missing, while also keeping whatever additional money you make for yourself.

The only problem was that Nick Leeson could never get good returns on the secret investments that he was making. He always lost money, which meant that he couldn't "pay back" the bank to hide what he did. So what is the solution? Simple, steal even more money, and keep trying to hit a big return that will cover the stolen amount plus the extra. Of course, as he kept stealing more and more money, he still could never get good returns. It was like everything he put money into just withered up and died. For example, he invested very heavily in Japan, during a time when Japan was experiencing a financial crisis, in hopes that he would makes tons of money in the recovery. However, this recovery never came, and the 1995 earthquake caused Japans equivalent of the stock market to collapse, completely eliminating any hope for a quick return on Japanese investments.

By the end of 1992, Leeson had lost $2 million dollars that was never actually his to begin with. By the end of 1993, this had swelled to $23 million. By the end of 1994, Leeson’s secret account had lost a total of GBP 208 million dollars. Leeson frantically purchased even more Nikkei futures contracts in hopes of winning back the money that he had already lost (Nikkei is the Japanese equivalent of Dow Jones Industrial Average).

Despite all this, the Bank's management still didn't notice what was going on. Leeson's unauthorized investments were costing the company millions. But Leeson fabricated profits to hide the insane amounts of money that he was losing. He was considered the company's rising star.

Brilliant. I actually admire this guy. He failed but his plan was really awesome. It seems that there is a pathological gambling style issue in some of these cases.

Sadly it's not a fraud, but it's a massive blunder

>Nick Leeson embezzled

Leeson gambled his bank's money for the thrills of it and to get an employee's bonus for profits from trades. Later he gambled even more in a vain attempt to cover his loses.

There's some suspicion that he might have siphoned off some money on the side, but that's in low million digits. Peanuts comparing to the overall loses.

>when you try to straddle the Nikkei a day before a massive earthquake hits Japan, losing so much money you cause the world's oldest bank to go bankrupt

the absolute madman

Also, to finish the story because I ran out of words, basically the bank he worked for immediately went under the moment people figured out that was going on. He was caught in Singapore and they put him in prison for fraud. However, he only spent a few years in jail because he developed a severe case of colon cancer. The prison doctor basically said he wasn't going to live for much longer, so he was let out. However, Leeson managed to survive the cancer and lives on to this day as a writer, speaker, and oddly enough, president of a football (soccer) club based in Ireland.

>tfw this guy gave himself and subsequently cured cancer to get out of jail

Leeson > Jesus

>delusional brainlet thinks he can beat the system
Doesn't even pale to Madoff. This is basically a child's tactic.

he's like the opposite of that guy who shipped coal to Wales and made a killing because it landed during a miner's strike

yeah and I heard some american guy directing a HF did the same for the crisis in 2008 in the US and earn some 4 billions as personal income.

>admire
either questionable choice of words or questionable period

Large reason why Madoff and Leeson kept their schemes going for so long is that many smart people who suspected that something fishy is going on deliberately wanted not to know. Otherwise they could have been accused of complicity or at least of not notifying the proper authorities. In fact, said authorities also wanted not to know.

Madoff as far as I know was widely suspected of front running. That would constitute a severe fraud, but it might have produced the results that Madoff claimed to have. So, greedy clients choose not to know, fl friends and relatives throughout the market authorities also chose not to know.

Same goes with Leeson. He regularly produced results that earned him, his colleagues and most importantly his superiors hefty bonuses. It was again beyond plausible to produce such results again and again. Everyone suspected than Leeson may be a bit dodgy. But again everyone pretended not to know. This could be the reason why Leeson had very loose supervising. In fact he as a director was his own supervisor as a trader.

>I think if he had been a little less ambitious in terms of what returns he promised his clients he could have continued undeterred.

Madoff's supposed returns weren't that high. They were higher than what the stock market could ever offer, but nowhere near the 'classic' Ponzi scheme where supposed returns reach two or even three digit percentages per year.

According to some investigators, Madoff was on the brink insolvency in early 2000s, about forty years after he founded his Ponzi scheme. And it is only the 2008 crash that finished the scheme. Many of his clients found themselves in difficult situation and chose to withdraw their funds regardless of the "no return" rule.

It's not unless the results were tampered with.

Ivar Kreuger also known as the "Match King".

news.bbc.co.uk/2/hi/business/7939403.stm

nytimes.com/2009/08/16/books/review/Salmon-t.html

economist.com/node/10278667 (be sure to read the response by his nephew to the article)

wolfstreet.com/2014/09/28/miracle-man-who-invented-off-balance-sheet-financial-engineering-thats-still-sinking-companies-today/

fortune.com/1933/05/01/a-3-part-series-on-the-life-and-death-of-ivar-kreuger/

>Ivar Kreuger

I remember my late granda's story that matches in pre-WW2 Poland were so expensive that people split them onto four.

It was thanks to this asshole.

en.wikipedia.org/wiki/Wilhelm_Voigt#Captain_of_K.C3.B6penick

For one he disguised it as long term investments so his clients/victims didn't expect a return immediately.

The pyramid scheme in Albania that would later cause a revolt and a revolution is an interesting read.

file.scirp.org/pdf/OJBM_2017012414181836.pdf

imf.org/external/pubs/ft/fandd/2000/03/jarvis.htm

White collar crime is pretty interesting

Oldest bank?

>pyramid scheme in Albania

That's also amazing. It was the classical Ponzi scheme and it went on for a few years before collapsing.

It definitely is. It's not violent like ordinary crime and you sometimes found yourself admiring the sophisticated scheme.

It should be noted however that a white collar criminal often cause far more harm than any crook armed with a club or gun.

Social Security is

>be poor Scottish peasant
>invest your entire life savings to start your life anew in a flourishing colony of tropical paradise known as 'The Territory of Poyais'
>colony even has a landed nobility system, parliament, uniformed military, bank, and currency
>hop on board one of 7 packed ships full of fellow colonists who also invested their entire life savings
>ship arrives after months of sailing
>literally nothing but jungle
>"M-maybe we just lost our course... "
>everyone sets up camp and waits for the 'Royal Poyais Government' to sail by and pick them up
>nobody ever comes
>everyone dies of malaria, starvation, and exposure
AYE, YE CAN TROOST ME LADDIE, I'M A FELLOW SCOT!

So you're basically saying that there were people who figured it out, but said nothing because they thought that what was going on would benefit them?

Nick Leeson worked for Barings Bank, which was technically the world's oldest bank in the world at the time, having been started in 1762, meaning that the bank actually pre-dated the American Revolution. It became defunct in 1995 as a direct result of Leeson's unauthorized high-risk trading in Japan.

Rather, people deliberately stopped short of figuring out what was going on. The implausible regularity of high profits suggested that something wasn't right. But since seemingly everyone was profiting, people avoided investigating what was going on.

en.wikipedia.org/wiki/Harry_Markopolos

You should read this guy's story if you want your blood to boil. The sheer incompetence of the regulatory agencies of America is kind of amazing

Had the SEC listened to him, loses would be billions smaller.

I believe that Madoff's safety net of friends helped to cover his ass.

Scope and a better ability to find more fools.

He's an amateur next to the Social Security Administration though.

easily one of the greatest pranks ever pulled

> Had the SEC listened to him, loses would be billions smaller

And they and their ilk never really forgave him for it. He later wrote about his decade of fighting against Madoff, and the Wall Street Journal, who simply refused to run the story when he originally came to them, published a really smug, smarmy review. Everybody, deep down, knew that Madoff was dirty, but they were making too much money to look into him.

Sergei Mavrodi, founder of the most famous post-Soviet Ponzi organization - MMM. There was a huge Ponzi wave in the 90s.
en.m.wikipedia.org/wiki/Sergei_Mavrodi
Right now he is globalizing through India, Nigeria and Zimbabwe.

>Once you pulled out your money, you won't be ever able to return to his firm.

Thats a really good idea for running a ponzi scheme

I assume a partially withdraw would trigger this stipulation?

you forgot
>bankrupted Scotland so bad they had to join england

LOLMETS

>and the Wall Street Journal, who simply refused to run the story when he originally came to them
I don't really understand the reasoning behind that. A guy is possibility running a scheme that could lose a lot of a people a lot of money and they think the best idea is to ignore/repress it? Until they cashed out nobody really made anything with the "no return" policy.

Everyone thought they knew the right time to cash out

did a pretty good job of explaining how Madoff managed to keep his scheme going, but a Ponzi scheme itself works as such:
You say you're opening an investment company. You ask people to give you their money, you'll invest it because you know more about the economy than them, and you get a cut of the revenue it generates. This is how an actual investment company works. However, a Ponzi scheme just skips the investment part and pays the "revenue" with other investors' money.
As an example, let's say that Joe invests $100 with me, and I promise it'll generate him $10 of revenue every month. However, I just pocket his $100. Now, Jim comes along and also invests $100 with me, and I promise him the same. I use $10 of Jim's money to pay Joe's revenue and pocket the rest. Then Dave invests, and I use $10 of his money to pay Jim, and so on and so forth. I just keep spending their money non-stop.
"But user," you're probably thinking, "what happens if people want their money back or you stop getting new investors?" And that's exactly where the whole thing falls apart, since there's no such thing as infinite growth. Most Ponzi schemes either last a short while (as in the case of Charles Ponzi himself) or last decades (as in Madoff's case).

Well, Madoff was a living legend of stock markets. A man who shaped them more than anyone else in recent decades.

To be fair, Markopolos was an employee of Madoff's competitors, which sort of blunted his accusations.

If you make it a law that people have to invest in your Ponzi Scheme you have infinite growth :^)

Yeah. It sounds horrible that they didn't listen to Markopolos, but that's with the hindsight we have today. Back then in sounded like:

>You know this guy Madoff, right? The living legend that taught us all how to trade in 21st century and who successfully runs his investment company for four decades. He's a total cheat. How do I know it? I work for his competitor and in we tried to lure some of his clients to us. We therefore tried to reverse engineer his trade techniques and completely failed. Trust me, ok?

No fraud list is complete without the Enron scandal.
en.wikipedia.org/wiki/Enron_scandal

Markopolos' testimony. Great to watch.
youtube.com/watch?v=uw_Tgu0txS0

It's more than that though. The numbers that Madoff was producing were mathematically impossible. He was showing growth of 1-3% every month for his clients. He was also producing regression lines and graphs which show perfect positive linear trends, which is impossible since such growth would be predicated on financial changes, which go through peeks and troughs because that is how the market works. This is just one of many examples of the way that Madoff's actions should have been visible to anybody who wanted to look.

True.
Markopolos definately deserves a credit for figuring out that Madoff is a fraud. However, to be fair we must admit that Markopolos wasn't a perfect whistleblower to be believed. He had personal stake since we worked for Madoff's competitors and he studied Madoff's method precisely because they wanted to lure one of Madoff's clients.

he continued to work on that after he left that company

That's definitely true. But he also had a Masters in Financing, and was generally renowned throughout the business world.

There's a great article on it in Counterpunch. I know that we don't like far-leftist publications on this board, and anything that is excessively partisan. But it's still a pretty good article.

counterpunch.org/2009/04/23/how-the-wall-street-journal-and-the-new-york-times-buried-the-madoff-scandal-for-at-least-four-years/

Yes he was renowned. However, he also worked at Madoff's direct competition and tried to reverse engineer Madoff's techniques.

When competition is fierce, companies often resort to dirty techniques like for example denouncing their rivals to authorities in the hope that some of the thrown dirt will stick or at least that investigation will disrupt the rival's operation.

In the hindsight it's revolting that no one did anything to stop Madoff with the information that Markopolos provided. Back then however it was somewhat understandable that his revelations were taken with a grain of salt.

Remember that the government actually allows this to happen because they support the capitalist system.

The financial sector in the U.S pays almost all the taxes, and they also donate heavily to individual candidates in order to keep doing what they are doing.

It wouldn't surprise me that a lot of government officials were also responsible for the 2008' financial crisis, but they simply seeded responsibility to people like Madoff and other corrupt actors.

Are general hoaxes allowed too? These two are too funny not to mention imo:
en.wikipedia.org/wiki/Berners_Street_hoax
en.wikipedia.org/wiki/Dreadnought_hoax

this shit makes me laugh every time I read about it.
what a fucking shyster lol

>Hurr durr
>Seeded

(((No reason at all goy)))

You want some good hoaxes?
en.wikipedia.org/wiki/Juan_Pujol_García

>Be average Juan living in spain
>Don't like the nazis
>Ask the UK to hire you as a spy, they turn you down
>Go to Germany and say you're some official who can spy on the UK for them
>They accept
>You've never been to the UK
>All your knowledge comes from travel brochures
>Start pranking them with obviously fake intel about the UK
>They believe you
>Your obvious bullshit gets intercepted by the brits
>Even perfidious little albion is impressed by the level of your ruse cruise
>Get picked up by MI5 to become a le ebin trole for the UK
>Make up bullshit spy network of 25 people and get Germany to pay them (you)
>Kill one off to explain bad intel, demand Germany pays the fake agent's fake widow a pension
>They agree
>Despite nothing you say being true, Germany trusts you enough to never double check what you say
>Get codes for enigma because you're such a great spy
>Convince Germany that D-Day is going to be somewhere else
>By the time it's too late to move everything, tell Germany where it's actually going to happen
>Germany disagrees
I know I'm forgetting half the antics this guy pulled, but the final score was something like this:
Bored Spaniard:
>~$4.5 million in today's money from Germany paying your network of spies
>Germany led on a series of multi year wild goose chases
>Respect of the UK
>Codes for the Enigma machine
>Iron Cross
>Order of the British Empire
>History remembers him as the greatest troll who ever lived

Nazis:
>Obviously fake intelligence
>Wasted effort and money
>Dignity

youtube.com/watch?v=5BfUB5a994k

Andy Vollmer, a bigwig at SEC, questioned about the Madoff affair. One of the most surreal videos on Youtube.

sounds like exactly what the govt is doing through the Fed -- audit it when?

prior to 2000s, 20% Interest rates on savings was the standard. then drastically went to 1%

what happened?
>globalisation ponzi scheme

your funds were invested in China/India

prior to 2000, gas was 1 a gallon for ages. then drastically went to $3-4 a gallon

what happened?
>peak oil ponzi scheme

fabricated peak oil propaganda is a creation of oil mafia to gouge oil prices

The lie resulted in the prices increased and every few years peak oil scaremongering would be repeated to drive higher oil prices...Pessimistic claims of future oil production made after 2007 stated that the peak had already occurred

They pushed the scam, that global oil production is about to peak, which in turn will signal the permanent end of cheap oil.

we were told that we passed peak oil more than a decade ago
>the rise in oil prices over the last decade was a result of the peak oil crisis
>shale oil utilized, price does not decrease
>already way past peak oil and Saudi declares it will dramatically increase oil supply, indefinitely
>shale business goes bust
>oil prices decline rapidly

all of a sudden peak oil propaganda magically disappears. we can close all the shale business and just rely on Saudi increased production once more.

the gov't actually subsidized production and purchase of gas-guzzling SUVs that get 10 miles per gallon. it is ironic that the increase in production and purchases of SUVs coincided with the peak oil crisis with dramatic rise in gas price.

it is absurd to see US going to war "for oil" because of "peak oil", "oil shortages", "oil price increases" and yet, at the same time they increase production of gas-guzzling SUVs, becoming the most common car on the road. The gov't even funded and subsidized purchases of SUVs for the population.

and at the same time: magically stop shale oil production, magically increase Saudi oil production, magically have dramatic oil price declines..

Oil/Energy Crisis ruse

the peak oil scam not only increased oil costs, it was the excuse to charge more for plane tickets. also charge baggage on planes and reduce services, which are still in effect today

meanwhile, we forget the peak oil scam for more urgent issues: oil prices are falling to destroy russian economy

California electricity crisis, also known as the Western U.S. Energy Crisis, was a situation in which the United States state of California had a shortage of electricity supply caused by market manipulation by big corporations like Enron

en.wikipedia.org/wiki/California_electricity_crisis
youtu.be/tSUvUUMTshw?t=106

>globalisation ponzi scheme funded by your savings
>peak oil scam

((they)) crashed the economy to recruit youth into the afgan/iraq war without a draft. job opportunities for military aged men were intentionally depressed in order to send them to fight.

>housing scam resulting in the 2007 bubble

the depressed economy was propped up by a housing bubble. the govt and financial institutions provided a "bail out" to the people in the form of low interest rates and lax regulations. the lack of job opportunities in the depressed economy forced people to exploit new career incentives created by financial institutions and govt focused on real estate speculation. with everyone speculating in real estate through "free money", the bubble burst.

inflation is another scam that is designed to keep people working by having their money lose value

new-rich asians buying our real estate is how we get back some of the money we gave them to buy the things they make that we once made. It is called trade.

The amount of autism is this one picture

Nixon literally created superpower China and the US continued to transfer the wealth and future of the west to China
would china be what it is today solely based on china's abilities and without western transfer of wealth and technology?

US is China's greatest ally. if it was not for the US, China would still be a country based on subsistence farming.
US literally created superpower China...
Nixon birthed superpower China and the US continued to transfer the wealth and future of the west to China
china would not be what it is today solely based on china's abilities and without western transfer of wealth and technology

China's rise was due to a transfer of wealth from the west.

>murica transfer of wealth/technology/industry to poor rural china
>murica create power strong china
>murica claim a strong china a problem
>murica plans on fighting strong china with totalitarian TTP eroding more citizen rights
>not creating a scapegoat to implement totalitarianism

the power brokers transferred:
-literally all the financial funds of US workers to China,
-transferred technology and jobs to China
-hyperinflated the housing so that only the Chinese (recipients of western funds) could afford the housing

the transfer of funds was done involuntarily without the consent of the owners of the funds
the power brokers took western funds sitting in banks and invested all of that in China.

all that wealth transfer was from your pockets. the private funds in bank accounts, the housing assets, the jobs, all transferred by corporate USA without your agreement...

>California electricity crisis, also known as the Western U.S. Energy Crisis, was a situation in which the United States state of California had a shortage of electricity supply caused by market manipulation by big corporations like Enron

Did anyone go to jail for it?

no, bush and rockefeller went on to scam and genocide the planet

There was no company in America closer to George W. Bush than Enron

abcnews.go.com/Politics/story?id=121269

thenation.com/article/enron-and-bushes

democracynow.org/2006/5/26/enron_the_bush_connection

Enron was nothing when looking at their other scams

>peak oil scam
>globalisation ponzi scheme ()
>middle east war scams

the best part is they use false flags to implement totalitarianism and profit from all of it

Madoff's mistake was jewing other Jews. Most ponzi schemes don't get persecuted because the schemers are smart enough to not betray their own tribe.

Ponzi schemes shouldn't be considered fraud, it's just using stupid people too make money

If ponzi schemes are fraud, kickstarters should be fraud too

this is the least known of ponzi schemes

Tyne fuck you are talking about? Ponzi was Italian.

That's pretty cool. I'm gonna tell people about that.

Italians are the same species as Jews.

Threads usually collapse after hours, days at best. How the hell has this thread managed to keep running for almost a week?

It only has 91 replies as well. Almost as if someone was carefully making sure it doesn't drop off the board by periodically replying.

Imagine if you're playing a game where part of how well you do is up to chance, and you start to get close to losing. But you then realize you can cheat a little and make it look like you're winning more than you actually are. You decide to do this temporarily just to get through the bad times and figure you can go back to playing fairly soon enough and no one will ever know the difference. But cheating is too easy and you keep doubling down until eventually the scope of your lies is so massive that you can't ever possibly go back to doing things honestly.

>Assmad Jew
It's all down hill for you now, buddy. Prepare your anus.