Blog 8 - Ponzi Schemes
I learned about financial fraud this week and I mainly discuss Ponzi scheme in this blog. Ponzi scheme is the name of investment fraud in the financial field, the origin of pyramid scheme. Many illegal MLM groups use this trick to collect money. This trick was invented by a speculator named Charles Ponzi. I will discuss what I learned in the lecture in combination with the case in China. Case in China Lenders need scale. Peer-to-peer ventures have failed to achieve this individually and collectively. Lufax is the latest to throw in the towel. China’s second-largest online lender is shrinking its peer-to-peer business, while denying rumours of a complete exit. The move signals more withdrawals and consolidation are on the way across the industry. Explosive growth was halted by a series of scandals. These included lender Ezubao’s $7.5bn Ponzi scheme, which claimed 1m victims two years ago. The ensuing government crackdown brought mass shutdowns. China’s total of online len...
