Ponzi Scheme

What is Ponzi Scheme?

Ponzi Scheme meaning Named after Charles Ponzi, a man with a remarkable criminal career in the early 20th century, the term has been used to describe pyramid arrangements whereby an enterprise makes payments to investors from the proceeds of a later investment rather than from profits of the underlying business venture, as the investors expected, and gives investors the impression that a legitimate profit-making business or investment opportunity exists, where in fact it is a mere fiction.

 

reference: U.S. COMMODITY FUTURES TRADING COMMISSION – CFTC Glossary