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March 20, 2009


Oh dear, the media seems to have only just discovered financial fraud. I'm sorry, but this is something that they really should be more aware of, all the time.

Hundreds of people in the United States are under investigation for financial scams, many involving Ponzi schemes, a U.S. regulator said, calling the phenomenon "rampant Ponzimonium."

While none are as mammoth as disgraced financier Bernard Madoff's $65 billion fraud, multimillion-dollar "mini Madoffs" are proliferating from New York to Hawaii, the head of the Commodity Futures Trading Commission said.

So far this year, the agency has uncovered 19 Ponzi schemes, which depend on an influx of new capital instead of investment profits to pay existing investors.

That compares with just 13 for all of 2008.

"Because of the economy, people are seeking redemptions more than they ever have and that's making a lot of these scams go belly up," Bart Chilton, commissioner of the Washington-based Commodity Futures Trading Commission, said in a telephone interview.

The thing that annoys here is that the regulator is saying that because more of them are going bust then they're finding more.  OK, I agree with Warren Buffett's point, that when the tide's going out that's when you find out who has been swimming naked.

But guys, the reason we hire regulators, the reason we put up with their burden on innovatve business, is because we want you to find and stop the fraudsters....whether the tide is in or out.

If you can only find these guys when the tide's out then what in hell are we paying you for?

March 20, 2009 in Finance | Permalink


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