Modus Operandi

DEFINITION of 'Modus Operandi'

A Latin term used in English to describe an individual or group's habitual way of operating. The term is commonly used when discussing criminal behavior, but does not exclusively refer to criminal behavior. Modus operandi is often shortened to M.O. in both writing and speaking.

BREAKING DOWN 'Modus Operandi'

A ponzi scheme's M.O. is to take money from new investors and use it to pay off old investors to create the appearance that the old investors are earning a return. A straight-A student's M.O. might be to get all her homework done the day before it is due, never miss a class and visit professors during their office hours once a week.



RELATED TERMS
  1. Net Operating Income - NOI

    A company's operating income after operating expenses are deducted, ...
  2. Caveat Emptor

    A neo-Latin phrase meaning "let the buyer beware." It is a principle ...
  3. Bernard Madoff

    The former chairman of the Nasdaq and founder of the market-making ...
  4. Pyramid Scheme

    An illegal investment scam based on a hierarchical setup. New ...
  5. Operating Cash Flow - OCF

    Operating Cash Flow (or OCF) is a measure of the amount of cash ...
  6. Ponzi Scheme

    A fraudulent investing scam promising high rates of return with ...
Related Articles
  1. Active Trading

    What Is A Pyramid Scheme?

    The FTC announced it had opened an official investigation of Herbalife, which has been accused of running a pyramid scheme. But what exactly does that mean?
  2. Personal Finance

    4 History-Making Wall Street Crooks

    Find out how these Wall Street high-rollers landed themselves in hot water.
  3. Retirement

    The Ghouls And Monsters On Wall Street

    Learn about some of the creepiest cases of fraud and the characters behind them.
  4. Term

    The History and Purpose of TQM

    Total quality management explores processes to enhance quality and productivity.
  5. Term

    What's an Incumbency Certificate?

    An incumbency certificate lists an organization’s incumbent directors and officers.
  6. Investing Basics

    Financial Boiler Rooms Today: Real-World Examples

    High-pressure sales environments pitching inflated penny stocks or faux companies exist and cost investors millions every year. Here are a few examples.
  7. Economics

    What's a Memorandum Of Understanding?

    A memorandum of understanding, or an MOU, is a written legal agreement.
  8. Economics

    Explaining Incorporation

    Incorporation is the process of legally becoming an entity that is separate from its owners.
  9. Economics

    What is a Firm?

    A firm is a business or organization that sells goods or services on a for-profit basis.
  10. Investing Basics

    Vertical Integration

    Vertical integration occurs when a company buys and controls other businesses along its supply chain.
RELATED FAQS
  1. Do working capital funds expire?

    While working capital funds do not expire, the working capital figure does change over time. This is because it is calculated ... Read Full Answer >>
  2. Does working capital include inventory?

    A company's working capital includes inventory, and increases in inventory make working capital increase. Working capital ... Read Full Answer >>
  3. How can I calculate funds from operation in Excel?

    In general, the terms "work in progress" and "work in process" are used interchangeably to refer to products midway through ... Read Full Answer >>
  4. When does Q4 start and finish?

    Most companies such as Facebook have financial years that end on December 31st. For these companies, the fourth quarter begins ... Read Full Answer >>
  5. When is it useful to look at a company's fixed asset turnover ratio?

    It is useful to look at a company's fixed asset turnover ratio when an outside observer, such as an investor, wants to know ... Read Full Answer >>
  6. What is the difference between perfect and imperfect competition?

    Perfect competition is a microeconomics concept that describes a market structure controlled entirely by market forces. In ... Read Full Answer >>
Hot Definitions
  1. Liquidation Margin

    Liquidation margin refers to the value of all of the equity positions in a margin account. If an investor or trader holds ...
  2. Black Swan

    An event or occurrence that deviates beyond what is normally expected of a situation and that would be extremely difficult ...
  3. Inverted Yield Curve

    An interest rate environment in which long-term debt instruments have a lower yield than short-term debt instruments of the ...
  4. Socially Responsible Investment - SRI

    An investment that is considered socially responsible because of the nature of the business the company conducts. Common ...
  5. Presidential Election Cycle (Theory)

    A theory developed by Yale Hirsch that states that U.S. stock markets are weakest in the year following the election of a ...
Trading Center