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DEFINITION of 'Ponzi Mania'

The seemingly sudden recognition of Ponzi schemes following the arrest of Bernard Madoff for operating an illegal Ponzi scheme. Ponzi mania took full force in December of 2008 when federal investigators discovered that Bernard Madoff had operated a huge Ponzi scheme over the past decade, defrauding investors of nearly $65 billion.




BREAKING DOWN 'Ponzi Mania'

In the wake of Madoff's arrest, the Securities and Exchange Commission and other federal investigators put their complete efforts into finding and shutting down illegal Ponzi schemes that were responsible for billions of dollars worth of losses to investors. Following the huge losses seen by Bernard Madoff's investors, individual investors across the world became much more conscious of the signs of potential Ponzi and pyramid schemes.

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