The Ponzi method is a financial

                                           

The Ponzi method is a financial


 method of deceiving people, practiced in many countries, and has a great success in certain 
groups of people, those who seek to get rich quickly without much effort or trouble, and is located in many varieties of people, including the learner and small and large, men or women. So what is the Ponzi method? Do we practice in the Kingdom? More importantly, are the relevant bodies, such as the Ministry of Trade and Industry, the Capital Market Authority and Chambers of Commerce, in their role in educating people and monitoring operations of a bona fide nature?
The method is named after Charles Ponzi, who practiced this method in the 1920s in the United States widely, and was able to sign tens of thousands of individuals in the context of his crime, deservedly deserved. His idea was not unique, it was known since ancient times, but he managed to attract people to it in an unprecedented way. He was able to achieve good financial returns by trading vouchers used in stamp trading. Which can be likened to the famous contributions to Sawa cards, which have killed many people here in the Kingdom.
However, Charles Ponzi was unable to continue to achieve the high returns promised by investors, which led him to resort to fraud and fraud to continue to provide services. It should be noted that many frauds do not arise for this particular purpose, but are often based on a particular trade, often high risk, and then deteriorate their financial situation sharply, the owner resort to various methods in an attempt to modify the situation, and not without Of some perseverance and self-pride, but all roads are closed in the face of the person resorting to fraud.
The solution of a person involved in a failed investment process is to pay old investors' dues through the funds of new investors. This process satisfies the old investors while attracting more new investors and thus continues to practice his business in the hope that he will be lucky and change his financial position. . The study of this method found that it succeed for several reasons, the first is that it prepares the investor to achieve a large return on a specific date, which tempts many people, especially when they see others to achieve promised returns, but often the fraudster put an option to the investor at the end of the period That a person can take the proceeds and withdraw his money or leave it grow more. Most investors are often favored to let their money grow, how they do not grow dramatically in a short time! A large proportion of investors are "increasing" capital to make a bigger and bigger profit.
Of course, not everyone is able to convince people to invest in it. The process requires a degree of credibility with the investment opportunity holder, which may be due to his experience in a particular field or to his reputation or due to elaborate propaganda. In fact, the biggest Ponzi operation in US history was by Bernard Madoff, who worked as a respected stockbroker and non-executive chairman of the US stock exchange, where he spent more than $ 60 billion in failed investments. He tried hard to change course, Finally, he used the Ponzi method, and finally his sons told him and he was imprisoned in a 150-year sentence.
So the Ponzi method is to convince a few people to enter into investments managed by an experienced person and achieve fantastic returns. When the method does not work as expected, which is certain because of the magnitude of the risk, the fraudster continues to make promises at the expense of new investors, and the process continues until the number of new investors fade. Then the fraudster tries to attract new investors and when he can not be forced to procrastinate in the payment of returns, which causes fear in the masses of investors, and suddenly find a number of investors who can not pay their returns, and the process is similar to the phenomenon of sudden withdrawal and large deposits from banks.
I personally know of several cases of the Ponzi method done here in the Kingdom, and there are those who say that the stock market as a whole in 2003 to 2006 was a Ponzi process at the national level !. In the case of stocks, the old investors were earning their high returns from the new investors, and every old investor would win from then on, until hundreds of thousands of people scrambled to withdraw their money. However, I believe that the responsible parties have a great role in monitoring the potential cases of the Ponzi schemes. It is easy to observe the size of the cash flows in the account of the fraudulent investor and thus to question the nature of the funds and their sources. This is not a difficult process, Banks in the field of money laundering. There are many women and men who have fallen victim to the Ponzi method. I know of a current situation. The crook has collected over 200 million riyals and is currently in prison, but it is too late.
I do not ask for trust in people and their money, but you can not ignore the reality that indicates the weakness of our investment culture. How do we do not find material in the economy taught in our schools at all, there is no lessons on how to invest and determine the degree of risk, It is unreasonable. Sometimes I have questions about an investment that someone intends to enter, and I am surprised by the person's conviction that the return is 20% or more guaranteed, so he does not differentiate between the designer