Who Gets Swindled in Ponzi Schemes?

@article{Deason2015WhoGS,
  title={Who Gets Swindled in Ponzi Schemes?},
  author={Stephen Deason and Shivaram Rajgopal and Gregory B. Waymire},
  journal={Emory University School of Law Legal Studies Research Paper Series},
  year={2015}
}
Extant knowledge of Ponzi schemes in the accounting and finance literature is mainly anecdotal. The consequence of this is that it is difficult to know what, if anything, can be done to deter these frauds. We seek to fill part of our knowledge gap about Ponzi schemes by providing large-scale evidence based on a sample of 376 Ponzi schemes prosecuted by the SEC between 1988 and 2012. Our evidence indicates that the majority of SEC-prosecuted schemes involve sums that are much lower than those in… 
Ponzi schemes and the roles of trust creation and maintenance
Purpose The purpose of this study is to elaborate on how schemers build and maintain trust essential for financial fraud that persists over many years. A Ponzi scheme is a form of financial
How Irrationality Works in Indonesia: A Case of Fake Investment
: In the conventional economic perspective, people or investors are assumed to behave rationally when choosing investment alternatives to maximize their profits. Shiller (2000) showed that the Ponzi
Ponzi Schemes and the Financial Sector: DMG and DRFE in Colombia
We use a novel dataset to estimate, for the first time in the literature, the effects of Ponzi schemes on the formal financial sector. DMG and DRFE, two Ponzi schemes that were shut down by the
Ponzi Schemes: An Analysis on Coping with Economic Recession in Nigeria
  • J. Jack, C. Ibekwe
  • Economics
    The Nigerian Journal of Sociology and Anthropology
  • 2018
The proliferation of Ponzi schemes in Nigeria appear to coincide with the official declaration of economic recession in early 2016. It is therefore pertinent to empirically investigate the nexus
The consequences of investment fraud for its victims*
Victims of investment fraud can experience adverse effects that go beyond the wealth transfer to the perpetrators. We study these consequences of investment scams using information on thousands of
Trust Busting: The Effect of Fraud on Investor Behavior
We study the importance of trust in the investment advisory industry by exploiting the geographic dispersion of victims of the Madoff Ponzi scheme. Residents of communities that were exposed to the
Why are people trapped in Ponzi and pyramid schemes?
TLDR
The conclusion is that optimism (emotional bias), confirmation bias, representativeness bias, framing bias and overconfidence positively influenced investment decisions related to Ponzi and pyramid schemes.
The Gordon Gekko Effect: The Role of Culture in the Financial Industry
Culture is a potent force in shaping individual and group behavior, yet it has received scant attention in the context of financial risk management and the recent financial crisis. I present a brief
The Role of Gatekeepers in Capital Markets
Gatekeepers in financial markets have the power to provide the institutional stability, fortitude, and direction necessary for the development and the smooth functioning of capital markets. At the
The economic importance of trust in many contexts is well understood : it is associated with economic growth
We study the importance of trust in the investment advisory industry by exploiting the geographic dispersion of victims of the Madoff Ponzi scheme. Residents of communities that were more exposed to
...
...

References

SHOWING 1-10 OF 35 REFERENCES
Who Blows the Whistle on Corporate Fraud?
What external control mechanisms are most effective in detecting corporate fraud? To address this question we study in depth all reported cases of corporate fraud in companies with more than 750
The Construction of a Trustworthy Investment Opportunity: Insights from the Madoff Fraud
In this paper, we use the investment fraud of Bernard Madoff to inquire into the production of trust in the context of financial markets. Drawing upon empirical data related to U.S. individual
The Press as a Watchdog for Accounting Fraud
This paper investigates the press's role as a monitor or “watchdog” for accounting fraud. I find that the press fulfills this role by rebroadcasting information from other information intermediaries
Do the SEC’s Enforcement Preferences Affect Corporate Misconduct?
Recent frauds have questioned the efficacy of the SEC's enforcement program. We hypothesize that differences in firms' information sets about SEC enforcement and constraints facing the SEC affect
Social networks and loss of capital
Deterrence: A Review of the Evidence by a Criminologist for Economists
This article reviews the evidence on the deterrent effect of police, imprisonment, and capital punishment and additionally summarizes knowledge of sanction risk perceptions. Studies of changes in
'With Friends Like These...': Toward a More Efficacious Response to Affinity-Based Securities and Investment Fraud
This article highlights the increase in affinity fraud - securities and investment fraud targeting members of a particular racial or ethnic group perpetrated either by a member of that group or
Local Does as Local is: Information Content of the Geography of Individual Investors&Apos; Common Stock Investments
Using a data set on the investments made by a large number of retail investors from 1991 to 1996, we find that households exhibit a strong preference for local investment - the average household
THE DARK SIDE OF ORGANIZATIONS: Mistake, Misconduct, and Disaster
▪ Abstract In keeping with traditional sociological concerns about order and disorder, this essay addresses the dark side of organizations. To build a theoretical basis for the dark side as an
...
...