The livestock connection scandal revives the debate on the scams and signals that investors should warn.
The situation of Livestock connection He turned on the alarms of investors to accusations that the company carried out a Ponzi scheme or pyramidal, a type of scam with years old and that is still in force despite the collections that the financial institutions suggest.
The current scenario of Livestock connection It is a loss of 230 million dollars. According to the counter hired by the company to explain to investors its situation, its system is a Ponzi scheme. “If one wants to pay fixed based on a variable activity, if it is going well barbaric, and if it goes wrong it ends in a Ponzi scheme. This ended with a Ponzi scheme, ”he said.
What is a Ponzi scheme?
A pyramidal scam or Ponzi scheme corresponds to a financial hoax where a natural or legal person It offers great profitability to its investors. The origin of that money is the same as the participants, who are asked to bring More investors To be able to follow the wheel.
However, once money stops entering (either because of a crisis, to the end of the number of people who enter, etc.) is when the money returns and the system falls. On the other hand, when investors want to withdraw the money invested, they normally receive evasive or invitations to re -invest, which hides the reality that profitability comes from the participants themselves.
This system was invented by the Italian scammer, Carlo Ponzi, who during the first postwar period (in 1919) created a company where he sold discontinued postal coupons in other countries and redeeming them at their nominal value in the United States as a form of arbitration and promising their customers for 50% benefits within a period of period of a period of 45 days, or 100% within 90 days.
The 5 keys not to fall into a Ponzi scheme
From what happened with Livestock connection And the uncovering within other companies, in a trend that comes on the rise, mainly with the help of social networks, the banks of the Uruguay, including the Central Bank (BCU) They gave some tips not to fall into this scam:
- High yields: One of the characteristics of this type of scams are the juicy returns that promise from investments. According to the BCU, every investment is a risk activity, so investments with high yields usually have this characteristic, then any “guaranteed” investment opportunity is often considered suspicious.
- Compulsory registration: Any person or company that offers investments or forms of savings must be registered in the BCU stock market. The registration is important since it ensures investors access to key information where they are putting their money, such as the management of the company, the management of their products, services and finances.
- Recruitment: Another factors that make suspect in the presence of a Ponzi scheme are the benefits they give to investors that bring others within network, attracting new victims to the scam.
- Advertising: the fact of having sponsorship and testimonies of public characters (frequently payments) that appeal to their personal or business experiences with the company.
- Consultation: From Banco Galicia, they also recommend talking with professionals or trusted people before making such a decision.
Source: Ambito
