Old habits die hard

• Tweet

• Tweet

Bernie Mad­off, is often the first per­son that comes to mind when you men­tion the words Ponzi scheme these days, in the midst of the ongo­ing finan­cial cri­sis. The Mad­off Ponzi scheme fab­ri­cat­ed almost $65 bil­lion of mon­ey that didn’t exist. The expo­nen­tial rela­tion­ship between find­ing new investors mon­ey to fund­ing the old investors overzeal­ous and unsus­tain­able gains were bound to come crash­ing down as new investors were nowhere to be seen,having lost con­fi­dence in the mar­kets in the after­math of the 2008 crash. One would think that investors would have learnt their les­son on when returns are too high and can not be jus­ti­fied by any legit­i­mate mar­ket­place, but old habits die hard in the cur­rent finan­cial cri­sis!

ZeekRewards.com, has an Alexa Traf­fic Rank of 128, attract­ing a huge online cus­tomer fol­low­ing through offer­ing investors exces­sive Ponzi like returns. These returns proved too good to be true when com­pa­ny was shut down by the SEC on Fri­day 17 August 2012 sug­gest­ed as a Ponzi scheme on the verge of col­lapse. Forbes.com report­ed:

The SEC says online mar­keter Paul Burks and his com­pa­ny raised more than $600 mil­lion from more than one mil­lion online cus­tomers through the web­site ZeekRewards.com since Jan­u­ary 2011. Investors were promised up to 50% of the company’s dai­ly net prof­its through a prof­it shar­ing sys­tem in which they accu­mu­late rewards points that they can use for cash pay­outs, accord­ing to the agency.

“How­ev­er, the web­site fraud­u­lent­ly con­veyed the false impres­sion that the com­pa­ny was extreme­ly prof­itable when, in fact, the pay­outs to investors bore no rela­tion to the company’s net prof­its. Most of ZeekRe­wards’ total rev­enues and the “net prof­its” paid to investors have been com­prised of funds received from new investors in clas­sic Ponzi scheme fash­ion,” the SEC claims.