In an article titled “The Role of Accounting in Ponzi Schemes” researchers identified and analyzed 387 Ponzi schemes prosecuted by the Securities and Exchange Commission between 1988 and 2012. The research team used court documents and SEC press releases to obtain details pertaining to their sample of 387 Ponzi schemes. For example, the researchers acquired information about the Ponzi scheme’s duration, amounts invested, and marketing methods used. Approximately half of the Ponzi schemes provided investors with fake financial reports, while only 13% of the schemes also included falsified clean audit reports. The researchers also find that providing investors with false audit reports significantly extends the life of Ponzi schemes.

Source: Forbes March 09, 2021 12:00 UTC