Tough Times Breed Ponzi Schemes

Check out this article by Renee McGaw:

The cracks show when you drain the pool. That’s how former Colorado securities commissioner Philip Feigin describes the resurgence in alleged Ponzi schemes.

 “You have the astonishing confluence of a significant downturn in the market coupled with great fear on the part of investors, and a desire to liquidate,” said Feigin, now a securities lawyer with Rothgerber Johnson & Lyons LLP in Denver. “Investors don’t want to reinvest. The stuff that fuels a Ponzi scheme is taken from the market, so it can’t go on.”

From Bernie Madoff, who pleaded guilty in March to the biggest investment fraud in Wall Street history, to Aurora money manager Shawn Merriman, who has been accused by the Securities and Exchange Commission of stealing at least $17 million, it seems like fraud is on the rise.

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