The Shocking State of Securities Fraud
And how to avoid being a Ponzi scheme victim
By Benjy Schirm, J.D. | Last updated on January 27, 2023Use these links to jump to different sections:
- What Is a Ponzi Scheme?
- What Should We Look Out For?
- What Is Being Done To Stop These Schemes?
- What Can I Do if I Suspect I’m a Victim of a Ponzi Scheme?
What Is a Ponzi Scheme?

What Should We Look Out For?
The Securities and Exchange Commission (SEC) warns that these schemes often promise high returns with low risk. People should investigate the histories of anybody taking their money to make sure they are registered with the SEC, and that they aren’t promising consistent returns all the time. The SEC’s investor protection website is a good starting point.What Is Being Done To Stop These Schemes?
The SEC and the Financial Industry Regulatory Authority (FINRA) manage and investigate whistleblower claims on fraudulent scammers. The Financial Times reports that often the investigations into these schemes are not very difficult—that a bit of common sense and the right questions typically uncover this fraud quite easily. The reality of the situation is that most Ponzi schemes are uncovered when investors attempt to take their money out of the market in a downturn. When they attempt to do so, they are unfortunately left with nothing. Currently in the beginning of 2018 the reports from the Wall Street Journal showing the highest recorded closing of the DOW at 25000.What Can I Do if I Suspect I’m a Victim of a Ponzi Scheme?
If searching through the SEC and FINRA’S websites has you worried, consult a securities fraud attorney to investigate and protect what may be left of your investment dollars. For more information about this area, read our securities and corporate finance law overview.What do I do next?
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