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    Ponzimonium: How Scam Artists Are Ripping Off America
    Ponzimonium: How Scam Artists Are Ripping Off America
    Ponzimonium: How Scam Artists Are Ripping Off America
    Ebook110 pages1 hour

    Ponzimonium: How Scam Artists Are Ripping Off America

    By U.S. Commodity Futures Trading Commission (CFTC)

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    About this ebook

    Ponzimonium is a book chock-full of advice to educate investors on the scam artists ripping off America. The primary message is that investors should not spend on unregulated companies or individuals who trade unregulated marketsbackground checks are priceless. The book tells provocative stories such as that of Darren Potter, who cleverly categorized investments in his program as loans” and ironically became a victim himself of a Ponzi scheme.

    There is an Investor Bill of Rights” that pushes investors to question fund lock-up clauses and warns them to be careful of those who do not properly explain obligations and fund expenses, require additional investment capital at a future point in time, or have not appropriately disclosed all risks. Some of the red flags called out in Ponzimonium include a fund’s need for secrecy and whether there are abnormal methods of accepting investments or whether conducting independent research on the fund is difficult. This is a must-read for anyone new or old to investing and the pitfalls that could make or break your bank.
    LanguageEnglish
    PublisherSkyhorse
    Release dateApr 19, 2016
    ISBN9781510707924
    Ponzimonium: How Scam Artists Are Ripping Off America

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      Book preview

      Ponzimonium - U.S. Commodity Futures Trading Commission (CFTC)

      Cover Page of PonzimoniumTitle Page of Ponzimonium

      Copyright © 2016 by U.S. Commodity Futures Trading Commission (CFTC)

      All rights reserved. No part of this book may be reproduced in any manner without the express written consent of the publisher, except in the case of brief excerpts in critical reviews or articles. All inquiries should be addressed to Skyhorse Publishing, 307 West 36th Street, 11th Floor, New York, NY 10018.

      Skyhorse Publishing books may be purchased in bulk at special discounts for sales promotion, corporate gifts, fund-raising, or educational purposes. Special editions can also be created to specifications. For details, contact the Special Sales Department, Skyhorse Publishing, 307 West 36th Street, 11th Floor, New York, NY 10018 or info@skyhorsepublishing.com.

      Skyhorse® and Skyhorse Publishing® are registered trademarks of Skyhorse Publishing, Inc.®, a Delaware corporation.

      Visit our website at www.skyhorsepublishing.com.

      10 9 8 7 6 5 4 3 2 1

      Library of Congress Cataloging-in-Publication Data is available on file.

      Cover design by Rain Saukas

      ISBN: 978-1-5107-0788-7

      Ebook ISBN: 978-1-5107-0792-4

      Printed in the United States of America

      Contents

      ABOUT THE U.S. COMMODITY FUTURES TRADING COMMISSION (CFTC)

      FOREWORD

      INTRODUCTION

      ONE

      No Client will Ever Lose a Penny

      TWO

      A Friend to Fraud

      THREE

      We Want You to Get to Know Us

      FOUR

      Ossie: An Extraordinary Liar

      FIVE

      The Un-Coolest Guy in the Room

      SIX

      It Was Just a Loan!

      SEVEN

      I’m a Believer

      EIGHT

      The Magician

      NINE

      A Car to Match Every Outfit

      TEN

      An Unfortunate Loss

      EPILOGUE

      NEXT STEPS

      INVESTORS’ BILL OF RIGHTS

      RED FLAGS OF FRAUD

      RESOURCES

      INVESTOR CHECKLIST

      ENDNOTES

      ABOUT THE AUTHOR

      About the US Commodity Futures Trading Commission (CFTC)

      Congress created the US Commodity Futures Trading Commission in 1974 as an independent agency with the mandate to regulate commodity futures and option markets in the United States. The CFTC’s fellow federal financial regulatory agencies include the Securities and Exchange Commission (SEC), the Federal Deposit Insurance Corporation (FDIC), the Federal Reserve Board, and the Office of the Comptroller of the Currency (OCC). The CFTC’s mandate has been renewed and expanded several times since 1974, most recently with the Dodd-Frank Wall Street Reform and Consumer Protection Act, signed into law by President Barack Obama on July 21, 2010. Dodd-Frank ushers in a new era for the CFTC by expanding its regulatory authority to the over-the-counter derivatives markets. Over-the-counter derivatives previously have not been regulated in the United States and were at the center of the 2008 financial crisis.

      FDIC—Federal agency that regulates national banks

      FEDERAL RESERVE BOARD—Federal agency that regulates certain state banks, bank holding companies, and foreign bank activity in the United States

      In 1974, the majority of futures trading took place in the agricultural sector. The CFTC’s history demonstrates, among other things, how the futures industry has become increasingly varied over time and encompasses a vast array of complex financial futures contracts.

      Today, the CFTC assures the economic utility of the futures markets by encouraging their competitiveness and efficiency, protecting market participants against fraud, manipulation, and abusive trading practices, and by ensuring the financial integrity of the clearing process. Through effective oversight, the CFTC enables the futures markets to serve the important function of providing a means for price discovery and offsetting price risk.

      The CFTC’s mission is to protect market users and the public from fraud, manipulation, and abusive practices related to the sale of commodity and financial futures and options—and now, over-the-counter derivatives—and to foster open, competitive, and financially sound futures and option markets.

      The CFTC relies on the public as an important source of information in carrying out its regulatory and enforcement responsibilities. Under a new provision in the Dodd-Frank Act, whistleblowers may be awarded monetarily by the CFTC for original information that leads to the successful enforcement of a CFTC action. This provision will make it easier for whistle-blowers to come forward with relevant information, helping to prosecute more scam artists and thus saving American taxpayers and consumers money in the long run. You may contact the CFTC to report suspicious activities or transactions that may involve the trading of commodity futures contracts or commodity options, including those that involve foreign currency. The CFTC may be contacted through its toll-free telephone number, 1-866-FON-CFTC (1-866-366-2382), via email at enforcement@cftc.gov, or by submitting an online form available through www.cftc.gov/ ConsumerProtection. The Commission may use this information in its investigations or enforcement actions, but it does not act on your behalf or represent you in any way.

      The CFTC also offers a reparations program that provides an inexpensive, impartial, and efficient forum for customer complaints against futures industry professionals. Customers may bring complaints against futures industry professionals currently or formerly registered with the CFTC if such individuals or firms allegedly violated the antifraud or other provisions of the Commodity Exchange Act. Reparations cases are decided by Judgment Officers or Administrative Law Judges, depending on the size of the claim. For more information, please contact the Office of Proceedings at 202-418-5350 or via email at questions@cftc.gov. Additional information is available online at www.cftc.gov/ConsumerProtection.

      Foreword

      Every single day, someone somewhere makes a gigantic mistake by giving his or her money to a fraudster. I’m not referring to those suckers born every minute types. I’m talking about regular, hardworking folks who play by the rules and think they are making sound investment decisions, often with significant sums of their non-disposable cash. Smooth talking masters of illusion are out there, twisting and turning their stories to convince would-be investors to hand over their funds. The consequences for these investors turned victims can be horrific: people losing money for their kids’ college funds; for detrimental health care expenses; or for their own retirement. Some lose their entire life savings. Others unknowingly bring friends and family into the scam thinking they are doing them a favor.

      A lot of times, fraudsters remain off the radar and get away with their swindles for years and even decades. Many individual investors don’t discover the fraud until they are faced with an economic downturn or some time-sensitive need. Then, when they try to retrieve their investments, they are told, Nope, you can’t have your money back right now. That’s when they discover that they have given their money to a fraudster. The funds were all part of a scam and the money is simply gone—kaput.

      What the fraudsters do in that time is even more amazing. You should see the stuff crooks do with other people’s money.

      Fortunately, these con artists are being apprehended and prosecuted. Federal, state, and local law enforcement officials have reported enormous increases in tips and criminal activity since the economic downturn began in 2008. As the markets began to flounder, people wanted out of their investments. However, cash redemptions are dangerous for Ponzi schemes, because when the money runs out, folks start talking. At

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