What Is a Meditation Pyramid?

Pyramid scheme, also known as laminated sales or laminated pyramid scheme, its basic idea is: let two or more people donate money to you, but you do nt need to give them anything, just bless They can become rich in exchangeas long as they can convince two or more people to donate money to them. The most common incarnation of pyramid scams is chain letters.

Pyramid scam

Pyramid scheme, also known as laminated sales or laminated pyramid scheme, its basic idea is: let two or more people donate money to you, but you do nt need to give them anything, just bless They can become rich in exchangeas long as they can convince two or more people to donate money to them. The most common incarnation of pyramid scams is chain letters.

Chinese name

Pyramid scam

Types of

scam

Actual

Interlocking response

Use

Cheat money

influences

Cause great problems to society and family

What is a "pyramid scam"? To put it bluntly, it is bait with high interest that is impossible to pay.

1997 Albania high-interest fundraising "pyramid"

Albania, a self-proclaimed "strategist at the core of Asia and Europe," built about 2 million bunkers throughout the country during the period of the Huocha rule. People often wonder what it means to build so many reinforced concrete bunkers for the poorest small European country with only 3 million people. However, these doubts finally disappeared in 1997. At the beginning of this year, the five-year Albanian high-interest fundraising "pyramid" finally collapsed, and investors who had almost lost their life savings went from the initial demonstrations to the impact on government offices and ruling party office buildings, robbing malls, and burning banks, among other things. Multiple bleeding incidents occurred. The deepening of the crisis made those originally useless bunkers quickly come in handy-after demonstrators in some cities snatched a large number of guns, they relied on solid bunkers to prepare for a sea change and the entire country was on the verge of collapse.

In Albania, these crooks promise to pay investors as much as 20% -30% of monthly interest, which is extremely attractive to Albanians with an average monthly salary of $ 65. Some people even sell land and houses for investment. As a result, in five years, 70% of households invested $ 1 billion equivalent to 30% of Albania's one-year gross domestic product into this bottomless pit.

However, this spectacular "pyramid" is destined to become only a grave to bury the dead. This kind of investment method is destined to collapse to a certain extent, because the deposits that can be absorbed are limited after all. Once the "fresh blood" in the economy is exhausted, the end of this "vampire" is coming. Although Albanian scammers have persisted for five years, 20-30% of their bait is relatively "conservative". A few years ago, their Russian counterparts were much bolder than their courage.

1994 MMM Investment Fund

In early 1994, the three brothers of the Russian resident Mavrodi announced the formation of an investment fund called MMM, claiming that its goal was to build it into the largest investment fund in Russia. The company assured the public that as long as it invests $ 100 in MMM, it will recover $ 500 in half a year, and in addition, it has a year-end return of up to 400%! Under such a call, about 15 million people in Russia bought MMM's stock. Due to the large number of shareholders joining, the stock price of MMM investment funds has soared from about $ 1 to $ 54 per share.

MMM fundraising is another typical pyramid-type investment fraud incident. The operating procedure is as follows: After the company's promoters draw up a fundraising plan, they are committed to enticing investors to participate in stocks. When the accumulation of funds reaches a certain amount, they start to use these funds to provide investors with returns, and so on. As long as the funds raised reach a certain size and can be recycled, it is necessary to meet daily redemptions and year-end dividends. However, once investors' confidence shakes, they stop investing, sell stocks or demand redemption, the pyramid will collapse, and those shareholders who participated in the investment later will lose their blood and become victims of fraud.

Unlike what happened in Albania, Russia s MMM is not due to running out of fuel, but is an accidental death in the middle. If it weren't for the Russian Federation government's concern that developments like MMM funds would have an impact on Russian commercial banks and affect savings rates, MMM would have been "longer" longer. On July 22, 1994, the Russian government suddenly publicly stated that it doubted the high rate of return of MMM. The news almost immediately led to the "melting" of this appalling "iceberg" within a week.

MMM's scam is easy to remind people of financial fraud such as the "Shen Taifu Great Wall Electromechanical Technology Industry Company illegal fund-raising fraud case" that occurred in China. Such cases are common in developing countries like China: raising millions from a peasant woman with only two years of culture in Chongqing; tens of millions raising by a retired female worker in Nanxiang, Fujian; and raising funds by an ordinary middle school teacher in Dalian Hou Chunxing, the former president of the People s Construction Bank of Guangdong s Enping City Branch, fortunately took out deposits and lent money in violation of regulations, causing a loss of 3.6 billion yuan to the country, which can be described as diverse.

2009 Madoff Fraud

In 2008, Bernard Madoff, a Wall Street legend and former chairman of the board of directors of the Nasdaq Stock Market, was arrested by the police on December 11 for alleged securities fraud. Prosecutors have accused him of losing at least $ 50 billion to investors by manipulating a hedge fund.

Madoff: Former Nasdaq chairman, he has always been regarded as a basic part of Wall Street. He also serves as an advisor to the SEC.

Madoff has long been known for being a pioneer in aggressive trading in financial markets

In the 1990s, Madoff set up an asset management company by using himself as a successful stock listing broker. Madoff raised funds for this fund company through his own social network. He made friends through the Palm Beach Country Club or other charitable organizations, and used some investors who have fallen into his trap as referees. Many customers give him, those introducers can receive commissions, and they are naturally happy to be middlemen, so there is a snowball effect. It is reported that it was in this club that Madoff found an investor who later attracted him to join other members.

On the surface, Madoff's fund is a low-risk investment. His huge fund has a stable profit return rate. Growth in a month may reach one to two percentage points. The reason behind the growth is that the fund is constantly doing business such as buying large-cap growth funds and fixed share options. This comprehensive investment portfolio has been considered to produce stable investment returns.

In 2005, according to the U.S. Securities and Exchange Commission, Madoff s investment fund business has gradually turned into a new Pang-type scam, and all the returns to investors come from more and more new entrants. Investors. According to earlier data from the Securities and Exchange Commission, as of January 2008, Madoff's funds managed a total of $ 17.1 billion. Although the situation continued to deteriorate in 2008, Madoff is still reporting to investors that his fund is still growing steadily, and this growth figure is still as high as 5.6% per month until November 2007, following S & P Compared to the average growth of 37.7%, this is certainly an impressive performance.

Although he is still reporting his growth record, more and more investors are beginning to ask Madoff to return his investment. According to the SEC, Madoff processed up to $ 7 billion in redemption requests in the first week of December alone.

Last Wednesday, Madoff told his two sons that it was all "a huge Ponzi scheme"-and that it is now getting closer to bankruptcy. The sons then approached the lawyers and eventually reported the scam to the federal government. Prior to his arrest, Madoff was still distributing a small amount of the remaining $ 30 billion to company employees and their relatives.

If it weren't for the global financial crisis, maybe this scam could continue. But the crisis made everything obvious, and Madoff acknowledged his actions. As Buffett said-you didn't know who was swimming naked until the ebb.

The incident took off so many mature investors and bankers' swim trunks. Hundreds of banks, hedge funds, and wealthy individuals are comfortable giving their money to the Madoff Fund because he promises such a seductive figure-even in difficult times, there are still 10 a year. % To 15% growth.

The affected banks came from all over the world. The three banks, BancoSantander, BNPParibas, and HSBC, which have survived the financial crisis so far, have also been hit deeply this time. Even worse, many Americans have found nothing but Madoff's funds in this crisis.

On June 29, 2009, he was sentenced to 150 years in prison by the Federal Court of the Southern District of New York. Madoff, 71, will spend the rest of his life in prison.

Looking at all these "pyramid" -type scams, it is not difficult to find that the tricks of the scammers are actually not clever. They just seize the speculative psychology of people eager to get rich and become rich, and they have found a void in financial supervision. Their idiomatic methods are nothing more than: high interest rates and lures; at the beginning of fund-raising, paying interest on schedule, increasing trust, and fishing for long-term fish; making false advertisements and tree facades; pulling flags as tiger skins; engaging in packaging, giving people " "The wealth is flourishing". However, it is interesting that such scams have been successful all over the world. The same incidents have occurred in many countries, especially the backward developing countries and countries with economies in transition. The poorer the country, the more backward the country, and the less developed the country, the more such a "pyramid" will be born.

The reason is that, in addition to the inadequate legal systems and financial supervision systems in these countries, and the general lack of financial knowledge of the people, a deeper reason may lie in the "financial depression" prevailing in these countries. The financial markets in these countries are generally strictly controlled by the government using administrative orders. Under the effect of official interest rates and credit quotas, interest rates cannot effectively reflect the relationship between the supply and demand of funds in the market. Both the deposit interest rate and the loan interest rate have been kept too low. Therefore, on the one hand, the people did not have the enthusiasm for saving in bank deposits; on the other hand, there was a serious "fund hunger" in this society.

Another aspect of "financial repression" is that social investment and financing channels are not sound, stock markets and securities trading are underdeveloped, and they do not even exist. At the same time, these countries generally have relatively severe inflation, but the society has not provided effective ways to prevent it. As a result, people have to "mandatoryly" pay "inflation tax" for savings under the current financial system. ". As a result, when people are unwilling to accept the current interest rate and cannot obtain an effective investment channel, they will easily fall into the trap of a "pyramid" scam.

Of course, the above remarks are not a deliberate or unintentional excuse for those scammers, but if financial repression really is the objective cause of the construction of "pyramid" fraud or other various financial evils, then we will fundamentally eradicate this tumor The method is self-evident.