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Investment Fraud after Investment Fraud, Another Ponzi Scheme Comes to Light

Stock-Markets / Scams Dec 04, 2009 - 02:19 AM GMT

By: Andrew_Abraham

Stock-Markets

So many thought all the investment frauds would have ended already. However more and more have come to light. One investment fraud which shocked me was Scott Rothstein who I knew from college.


He ran a ponzi scheme to the tune of $1.2 Billion dollars. Scott Rothstein was a lawyer who donated a great deal of money to all types of charities with the guise he was an honest attorney. Rothstein hobnailed with successful business people, politicians and even Dan Marino. Scott Rothstein Ponzi scheme was based on selling settlements of lawsuits. Now Scott is looking at life in prison.. But worse off his investors lost millions and millions of dollars probably not recoverable.

Another recent investment fraud is Thomas Petters. H has been convicted of running a $3.65 billion Ponzi scheme.

Thomas Petters fraud involved selling bogus notes linked to consumer electronics sales which never actually happened. Investors in Petters Co. were told they were buying bulk electronics which were being resold to big-box retailers. Hedge funds and high net worth investors were taken in on this Ponzi scheme.

Again Petters faces up to life in prison.

The question is why are people so foolish? Was it greed or stupidity? Maybe these people were looking for a low risk avenue to generate positive returns? The reality is there is no free lunch in trading. Those who seek to avoid risk get further embroiled in it. So how does avoid these type of scams? I would suggest managed accounts. In a managed account the commodity trading advisor or money manager does not have access to your funds. The commodity trading advisor or money manager can only place buy and sell orders. This is one step to avoid fraud and scams.

Andrew Abraham
www.myinvestorsplace.com

Andrew Abraham has been in the financial arena since 1990. He is a commodity trading advisor and co manager of a Commodity Pool. Since 1993 Andrew has been a proponent of quantitative mechanical trading programs. Andrew's major concern is not only total return on investment but rather the amount of risk that one would have to tolerate in order to achieve returns He focuses on developing quant models that encompass strict risk adherence and correlation. He has been a speaker at conferences as well as an author of numerous articles. Andrew has spent years researching ideas that have the potential to outperform indices as well as maintain fewer draw downs.

Visit Angus Jackson Partners (http://www.angusjacksonpartners.com) Contact: A.Abraham@AngusJackson.com (mailto:A.Abraham@AngusJackson.com)

© 2009 Copyright Andrew Abraham - All Rights Reserved
Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


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