Author Topic: Financial Schemes: Spotting the Fakes  (Read 971 times)

islander

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Financial Schemes: Spotting the Fakes
« on: January 27, 2013, 03:39:33 PM »
the facts:

one manuel amalilio, a filipino citizen and fugitive in malaysia, founder of the company aman futures group phil. inc., and the alleged ringleader of the P12-billion ponzi scheme that victimized 15,000 filipinos in the visayas and mindanao, has had his extradition from malaysia to the philippines stopped by malaysian authorities at the airport of kota kinabalu.  he purportedly is related to a high-ranking official at sabah state and goes by the malaysian name of mohammad suffian saaid.


Manuel Amalilio aka Mohammad Suffian Saaid

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islander

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Re: Financial Schemes: Spotting the Fakes
« Reply #1 on: January 27, 2013, 05:33:54 PM »
financial schemes worth watching out for, and avoiding:

The Ponzi Scheme

A Ponzi scheme is a fraudulent investment operation that pays returns to its investors from their own money or the money paid by subsequent investors, rather than from profit earned by the individual or organization running the operation.

The system is destined to collapse because the earnings, if any, are less than the payments to investors.


1910 police mugshot of Charles Ponzi, the namesake of the scheme

-wikipedia

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Republic Act 8485 (Animal Welfare Act of 1998, Philippines), as amended and strengthened by House  Bill 6893 of 2013--- violation means a maximum of P250,000 fine with a corresponding three-year jail term and a minimum of P30,000 fine and six months imprisonment

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islander

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Re: Financial Schemes: Spotting the Fakes
« Reply #2 on: January 27, 2013, 05:36:03 PM »
Unraveling of a Ponzi scheme

When a Ponzi scheme is not stopped by the authorities, it sooner or later falls apart for one of the following reasons:

The promoter vanishes, taking all the remaining investment money (minus payouts to investors already made).

Since the scheme requires a continual stream of investments to fund higher returns, once investment slows down, the scheme collapses as the promoter starts having problems paying the promised returns (the higher the returns, the greater the risk of the Ponzi scheme collapsing). Such liquidity crises often trigger panics, as more people start asking for their money, similar to a bank run.

External market forces, such as a sharp decline in the economy (for example, the Madoff investment scandal during the market downturn of 2008), cause many investors to withdraw part or all of their funds. (wikipedia)

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Republic Act 8485 (Animal Welfare Act of 1998, Philippines), as amended and strengthened by House  Bill 6893 of 2013--- violation means a maximum of P250,000 fine with a corresponding three-year jail term and a minimum of P30,000 fine and six months imprisonment

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islander

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Re: Financial Schemes: Spotting the Fakes
« Reply #3 on: January 27, 2013, 05:53:36 PM »
The Pyramid Scheme

A pyramid scheme is a non-sustainable business model that involves promising participants payment or services, primarily for enrolling other people into the scheme, rather than supplying any real investment or sale of products or services to the public.

These types of schemes have existed for at least a century, some with variations to hide their true nature, and because of this, many people believe that all multilevel marketing plans are also pyramid schemes.


The unsustainable exponential progression of a classic pyramid scheme

-wikipedia

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Republic Act 8485 (Animal Welfare Act of 1998, Philippines), as amended and strengthened by House  Bill 6893 of 2013--- violation means a maximum of P250,000 fine with a corresponding three-year jail term and a minimum of P30,000 fine and six months imprisonment

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islander

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Re: Financial Schemes: Spotting the Fakes
« Reply #4 on: January 27, 2013, 05:57:23 PM »
Differences between a Pyramid scheme and a Ponzi scheme:

In a Ponzi scheme, the schemer acts as a "hub" for the victims, interacting with all of them directly. In a pyramid scheme, those who recruit additional participants benefit directly. (In fact, failure to recruit typically means no investment return.)

A Ponzi scheme claims to rely on some esoteric investment approach and often attracts well-to-do investors; whereas pyramid schemes explicitly claim that new money will be the source of payout for the initial investments.

A pyramid scheme typically collapses much faster because it requires exponential increases in participants to sustain it. By contrast, Ponzi schemes can survive simply by persuading most existing participants to reinvest their money, with a relatively small number of new participants.

-wikipedia

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Republic Act 8485 (Animal Welfare Act of 1998, Philippines), as amended and strengthened by House  Bill 6893 of 2013--- violation means a maximum of P250,000 fine with a corresponding three-year jail term and a minimum of P30,000 fine and six months imprisonment

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islander

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Re: Financial Schemes: Spotting the Fakes
« Reply #5 on: January 27, 2013, 06:08:51 PM »
Bucket shop (stock market)

As defined by the U.S. Supreme Court a Bucket shop is "[a]n establishment, nominally for the transaction of a stock exchange business, or business of similar character, but really for the registration of bets, or wagers, usually for small amounts, on the rise or fall of the prices of stocks, grain, oil, etc., there being no transfer or delivery of the stock or commodities nominally dealt in."

The terms of trade were different for each bucket shop, but bucket shops typically catered to customers who traded on thin margins, even as low as 1%. Most bucket shops refused to make margin calls, so that if the stock price fell even momentarily to the limit of the client's margin, the client would lose his entire investment.

-wikipedia

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Republic Act 8485 (Animal Welfare Act of 1998, Philippines), as amended and strengthened by House  Bill 6893 of 2013--- violation means a maximum of P250,000 fine with a corresponding three-year jail term and a minimum of P30,000 fine and six months imprisonment

Book your travel tickets anywhere in the world, go to www.12go.co

islander

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Re: Financial Schemes: Spotting the Fakes
« Reply #6 on: January 27, 2013, 06:11:21 PM »
The highly leveraged use of margins theoretically gave the speculators equally large upside potential. However, if a bucket shop held a large position on a stock, it might sell the stock on the real stock exchange, causing the price on the ticker tape to momentarily move down enough to wipe out its client's margins, and the bucket shop could take 100% of their investments.

They were made illegal after they were cited as a major contributor to the two stock market crashes in the early 1900s.

House stock scam

The term bucket shop is now applied to any fraudulent stock-selling operation such as a boiler room, which has an undisclosed relationship with the company being promoted or undisclosed profit from the sale of house stock being promoted. A bucket shop promotes (via telephone or email) thinly traded or even fraudulent investments.

-wikipedia

Linkback: https://tubagbohol.mikeligalig.com/index.php?topic=66386.0
Republic Act 8485 (Animal Welfare Act of 1998, Philippines), as amended and strengthened by House  Bill 6893 of 2013--- violation means a maximum of P250,000 fine with a corresponding three-year jail term and a minimum of P30,000 fine and six months imprisonment

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islander

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Re: Financial Schemes: Spotting the Fakes
« Reply #7 on: January 27, 2013, 11:29:18 PM »
Get-rich-quick scheme

A get-rich-quick scheme is a plan to acquire high rates of return for a small investment. The term "get rich quick" has been used to describe shady investments since at least the early 1900s.

Most schemes promise that participants can obtain this high rate of return with little risk, and with little skill, effort, or time. Get rich quick schemes often assert that wealth can be obtained by working at home. Legal and quasi-legal get-rich-quick schemes are frequently advertised on infomercials and in magazines and newspapers. Illegal schemes or scams are often advertised through spam or cold calling. Some forms of advertising for these schemes market books or compact discs about getting rich quick rather than asking participants to invest directly in a concrete scheme.

-wikipedia

Linkback: https://tubagbohol.mikeligalig.com/index.php?topic=66386.0
Republic Act 8485 (Animal Welfare Act of 1998, Philippines), as amended and strengthened by House  Bill 6893 of 2013--- violation means a maximum of P250,000 fine with a corresponding three-year jail term and a minimum of P30,000 fine and six months imprisonment

Book your travel tickets anywhere in the world, go to www.12go.co

islander

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Re: Financial Schemes: Spotting the Fakes
« Reply #8 on: January 27, 2013, 11:34:05 PM »
Online get-rich-quick schemes

Get-rich-quick schemes that operate completely on the Internet typically promote “secret formulas” to affiliate marketing and affiliate advertising.

The scheme will usually claim that it requires no special IT or marketing skills and will provide an unrealistic time frame in which the consumer could make hundreds of thousands, if not millions of dollars.

Schemes of this nature usually have catchy titles and images associated with wealth and luxury to encourage potential victims into paying signing up fees which can range from several dollars to thousands of dollars. The get-rich-quick scheme will heavily imply that the consumer will be able to earn much more than this small investment when they apply the special, secret techniques revealed in their training material they will send. Such training material is typically in the form of e-books or training CDs.

-wikipedia

Linkback: https://tubagbohol.mikeligalig.com/index.php?topic=66386.0
Republic Act 8485 (Animal Welfare Act of 1998, Philippines), as amended and strengthened by House  Bill 6893 of 2013--- violation means a maximum of P250,000 fine with a corresponding three-year jail term and a minimum of P30,000 fine and six months imprisonment

Book your travel tickets anywhere in the world, go to www.12go.co

islander

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Re: Financial Schemes: Spotting the Fakes
« Reply #9 on: January 27, 2013, 11:47:40 PM »
Warning indicators:

#They will imply that anyone signing up will become rich within months to a year.

#They will tell potential victims that the route to success is by following “secret formulas” that no one else knows about.

#They will often claim they have been seen on various websites such as Google and YouTube, causing the viewer to assume said websites endorse the product.

#They will use pressuring tactics to get you to sign up quickly, such as claiming that there are only a certain amount of copies of a CD left, or using special discount prices that are only available for a short amount of time.

#Schemes such as this will often employ the tactic of displaying testimonials from “previous users.”

#When trying to navigate away from their website, users are often presented with popup windows offering further discounts, in an attempt to make the user feel special.

-wikipedia

Linkback: https://tubagbohol.mikeligalig.com/index.php?topic=66386.0
Republic Act 8485 (Animal Welfare Act of 1998, Philippines), as amended and strengthened by House  Bill 6893 of 2013--- violation means a maximum of P250,000 fine with a corresponding three-year jail term and a minimum of P30,000 fine and six months imprisonment

Book your travel tickets anywhere in the world, go to www.12go.co

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Lorenzo

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Re: Financial Schemes: Spotting the Fakes
« Reply #10 on: January 28, 2013, 01:15:08 AM »
In other words, be careful with your money.

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