People have been investing their money for hundreds of years. Earlier, they would invest in gold, real estate, or cattle, whereas now, they prefer to invest in different financial schemes. That being said, things don’t always turn out as expected. Sometimes, the companies where people have invested go bankrupt, or the investment schemes come out as fraudulent ones.
This post mentions such investment frauds that left thousands of people cashless in the past. Make sure you check them out, learn from them, and reach out to a skilled financial fraud law firm like https://www.erezlaw.com/ in case your broker tries to trick you.
Biggest Investment Frauds:
Before you learn about the investment frauds that affected many people in the past, understand one thing. Investment frauds happen even today. Each year, more than 30 million people lose their money to such frauds and are forced to go bankrupt due to a lack of knowledge. Though you cannot predict everything about the financial market, never let such frauds affect your life. Consider taking the legal route if anything similar happens with you in the future.
One of the biggest investment frauds was reported in the first half of the 19th century. The pyramid scheme named Charles Ponzi promised all the investors a return of 50% in just 45 days. Initially, the returns were paid to old customers from the money invested by new customers.
After being active for some time, the scheme failed miserably in 1920, leaving five leading banks and hundreds of investors ruined financially. At that time, the fraud was worth $20 million, which is around $270 million in today’s terms.
Another investment fraud that deserves to be on this list was committed in the early 2000s by Bernard Ebbers in the form of overstated cash flows. The estimated value of this fraud was worth $100 billion at that time. Not to mention, Ebbers was convicted in 2005 and sent to jail for 25 years.
There are many more such cases that you can take a look at for upgrading your awareness about how investment fraud happens. Make sure you learn from them and take necessary legal action if your broker tries to trick you into any such scheme.