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The purpose of this paper is to analyse the regulation of the financial crime of Ponzi scheme in Mauritius. Contrary to money laundering which has a legal framework to combat it, for Ponzi scheme, there is no specific legal mechanism to combat this particular financial crime. Therefore, the aim of the paper is to provide for an analysis of Ponzi scheme which includes, inter alia, the definition of a Ponzi scheme, its modus operandi and how it should be tackled. Focus will be placed on devising a specific legal framework for it in Mauritius.

The research method used to conduct this research and write this paper is a black letter legal research method. An analysis of several laws and cases is carried out so as to provide for the legal background of the research.

The investigation conducted in this paper will lead to the conclusion that Mauritius has to devise a law which will specifically combat Ponzi schemes. This law shall provide for the ways to counter this financial crime as well as the duties of the various financial supervisory bodies.

The paper provides for an analysis of the operation of Ponzi scheme in the Mauritian context. The paper also examines the existing legal framework that combats this financial crime in Mauritius and highlights its strengths and weaknesses.

This study aims to, firstly, develop a red flag checklist for cryptocurrency Ponzi schemes and, secondly, to test this red flag checklist against publicly available marketing material for Mirror Trading International (MTI). The red flag checklist test seeks to establish if MTI’s marketing material posted on YouTube^® (in the form of a live video presentation) exhibits any of the red flags from the checklist.

The study uses a structured literature review and qualitative analysis of red flags for Ponzi and cryptocurrency Ponzi schemes.

A research lacuna was discovered with regard to cryptocurrency Ponzi scheme red flags. By means of a structured literature review, journal papers were identified that listed and discussed Ponzi scheme red flags. The red flags from the identified journal papers were subsequently used in a qualitative analysis. The analyses and syntheses resulted in the development of a red flag checklist for cryptocurrency Ponzi schemes, with five red flag categories, containing 18 associated red flags. The red flag checklist was then tested against MTI’s marketing material (a transcription of a live YouTube presentation). The test resulted in MTI’s marketing material exhibiting 88% of the red flags contained within the checklist.

The inherent limitations in the design of using a structured literature review and the lack of research regarding the cryptocurrency Ponzi scheme red flags.

The study provides a red flag checklist for cryptocurrency Ponzi schemes. The red flag checklist can be applied to a cryptocurrency investment scheme’s marketing material to establish if it exhibits any of these red flags.

The red flag checklist can be applied to a cryptocurrency investment scheme’s marketing material to establish if it exhibits any of these red flags.

The study provides a red flag checklist for cryptocurrency Ponzi schemes.

This paper aims to identify psychological factors that influence people to be involved in Ponzi and pyramid schemes.

A psychological approach to finance or behavioural finance is applied in this research because of the assumption that human beings are not always rational. The sample consisted of 98 investors in 11 cities in Indonesia who were or had invested in an investment program with a Ponzi or pyramid scheme. The snowball sampling technique was applied.

The conclusion is that optimism (emotional bias), confirmation bias, representativeness bias, framing bias and overconfidence (cognitive bias) positively influenced investment decisions related to Ponzi and pyramid schemes.

The novelty aspect of this research is the implementation of a behavioural finance perspective to answer and express the fascinating phenomenon of Ponzi and pyramid investment schemes.

This paper aims to examine the nature and operations of the two main Ponzi schemes (DKM Diamond Micro Finance Company and Menzgold Company Limited). It explores how such dubious schemes were able to circumvent financial regulatory bodies and their impact on the social, political and economic spheres of Ghana.

The paper adopts both quantitative and qualitative research approaches and relies on secondary sources of data from the Bank of Ghana, World Bank and textbooks, etc.

It was found out that inadequate supervisory role by financial regulators was a factor that made these schemes thrive in Ghana which had dire consequences on the socio-economic of the country.

This is the first paper that explores the major Ponzi schemes in Ghana.

News items like “A whopping 2 lakh gullible investors were cheated…….” amply illustrate the extent of problems and hardships caused by financial frauds related to Ponzi schemes, collective investment schemes (CIS), unregulated deposit schemes, etc. In India, over the years, many Ponzi and unregulated investment schemes have taken place, causing huge economic and financial loss to Indian economy. This paper aims to examine why investment such schemes like Ponzi schemes and CIS become popular, how such schemes got operated in different periods and what could be done to safeguard the interests of investors.

The analysis is done based on secondary data and research work of various researchers, organisation and institutions, which are available in the public domain.

This paper has tried to analyse various characteristics of such fraudulent schemes, like their modus operandi, promotional activity, background of promoters and legal process involved in recouping financial loss of millions of investors. This paper also examines the demand-side factors that are responsible for popularity of those schemes in India. Noting the regulatory changes and other initiative taken by regulatory authorities to control the supply of unregulated investment schemes, this paper indicates potential actions, which could be undertaken to make people aware about the risks and issues related with such fraudulent schemes.

This paper gives an overview about various aspects of unregulated investment schemes, which have duped numerous people at different point of time. To the best of the authors’ knowledge, this research work is original and has not been published in any other journal.

The purpose of this article is to expose the Miller‐Modigliani 1961 Ponzi scheme that has masqueraded as a dividend irrelevance proof, and show that it constituted a Ponzi scheme at the time of publication and ever since publication. This is important especially as Miller‐Modigliani 1961 stated in the first sentence of their article that their dividend irrelevance proof was targeted at corporate officials, investors and economists seeking to undertake and appraise the functioning of capital markets.

The equations and notation used by Miller‐Modigliani 1961 to prove dividend irrelevance were carefully considered and analysed in order to establish whether proof reliably, validly and unambiguously proved dividend irrelevance. In addition, statute on both sides of the Atlantic, UK and USA, was considered in order to ascertain the legal standing of their proof.

This article shows that the Miller‐Modigliani 1961 dividend irrelevance proof constituted a recipe for a Ponzi scheme in terms of statute at the time of publication and ever since publication. Since Miller‐Modigliani 1961 made extensive reference to the works of eminent finance researchers and academics of the 1930s, 1940s, and 1950s, as well as to their Modigliani‐Miller 1958 seminal article, and attentively present and discuss the intricacies of the arguments these researchers made to the progression of knowledge, it would be challenging to content that they were unaware or ignorant of important legislation that applied in 1961.

There is no evidence from a scrutiny of publicly available secondary sources to suggest that the Miller‐Modigliani 1961 Ponzi scheme, alias “dividend irrelevance” has previously been done or published. This is surprising because the Miller‐Modigliani 1961 dividend irrelevance proof has occupied a particularly prominent position in the finance literature and has been the subject of numerous studies and research projects.

Most scientific research has focused on understanding Ponzi schemes from the point of view of the schemes and their operators, based on qualitative analysis. This paper aims to analyze Ponzi schemes from the perspective of their investors, emphasizing behavioral aspects, which have been little explored in the scientific literature, especially in quantitative research. In this way, the authors sought to understand the effects of heuristics and cognitive biases in understanding investor behavior.

A logistic regression was carried out with Brazilian investors, some of them participants in Ponzi schemes, who answered a structured questionnaire by means of a survey.

The authors found that social pressures, overconfidence and deliberate ignorance lead to credulity, generating little risk analysis and the desire to make a lot of money quickly.

Helping investors improve their levels of information through financial education and self-knowledge about their behavior. Contribute to the competent authorities in the search for improvements in the information displayed to investors.

Understanding the mechanisms used when making a financial decision from the point of view of investors in general, but especially those exposed to Ponzi schemes, has the mission of enlightening them about the importance of financial education and the weight of psychological factors so that they can reduce the effects of heuristics and analysis biases when faced with a financial decision.

The basis of this work will be the inclusion of psychological variables and financial education, adapting existing models in an attempt to demonstrate the effects they may or may not have on mental accounting in the specific case of investors

This paper aims to analyze the attributes of Ponzi schemes (“Ponzis”) to determine whether they are a unique class of financial fraud.

The authors apply the disposition-based fraud model to classify and differentiate the attributes of Ponzis. This classification exercise helps comprehend the distinct drivers of Ponzis.

Fraud risk factors of Ponzis are different from those involved in other financial frauds. Four propositions about risk and risk mitigation measures are developed.

The research approach used is conceptual, not empirical. However, the insights from this exercise should inform how different Ponzis are from other financial frauds and why they should be treated as a separate class for prevention and enforcement. In turn, this may trigger an interest in empirical research focused on the unique risks of Ponzis.

Knowledge of risk factors unique to Ponzis will permit a consideration of customized risk mitigation measures to prevent or detect Ponzis. Enforcement actions can also become more effective because of a distinct risk-based classification of Ponzis.

The prevention of damage from Ponzis hinges upon how well prospective victims are educated to become aware of signs of Ponzis. This should lead to the more effective protection of investors from victimization from Ponzi schemes.

The implicit understanding that all financial frauds are alike and that the risk-factors involved are substantially the same across all classes of fraud is challenged. This revelation opens opportunities to add value through focused research on Ponzis as a distinct class of fraud.

This paper aims to empirically identify factors that increase consumer vulnerability to pyramid scheme fraud and compares/contrasts dynamics and implications of pyramid and Ponzi fraud.

Statistical techniques, including multiple regression, are used to analyze participant data (with over half a million individuals) from a now-defunct US-based pyramid scheme, Fortune Hi-Tech Marketing.

Findings suggest that this pyramid scheme flourished in counties with identifiable affinity groups: religious communities, Hispanic populations and certain age cohorts (e.g. recently retired). Recruitment success varied significantly between geographic regions, with the highest levels of recruitment in the South. While prior research finds a possible positive relationship between education and Ponzi participation, this is not the case in the pyramid scheme studied. Furthermore, while Ponzi schemes might be pro-cyclical, collapsing during contractions when participants seek to extract their money, this pyramid scheme exhibited counter-cyclical behavior.

State and federal regulators, as well as consumer protection advocates, should learn from analysis of past pyramid scheme cases. Such analysis informs allocation of scarce resources and supports the case for targeted, active education. Clarifying differences between Ponzi and pyramid fraud helps to support clear and effective intervention.

This is the first research to analyze national participant-level data from a pyramid scheme to inform future action. While it confirms some past findings, such as the connection to affinity fraud, it adds to collective knowledge on pyramid schemes and the differences between pyramid and Ponzi fraud.