Ponzi Mania

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.

Investopedia explains '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.



Related Video for 'Ponzi Mania'

comments powered by Disqus
Hot Definitions
  1. Harvest Strategy

    A strategy in which investment in a particular line of business is reduced or eliminated because the revenue brought in by additional investment would not warrant the expense. A harvest strategy is employed when a line of business is considered to be a cash cow, meaning that the brand is mature and is unlikely to grow if more investment is added.
  2. Stop-Limit Order

    An order placed with a broker that combines the features of stop order with those of a limit order. A stop-limit order will be executed at a specified price (or better) after a given stop price has been reached. Once the stop price is reached, the stop-limit order becomes a limit order to buy (or sell) at the limit price or better.
  3. Pareto Principle

    A principle, named after economist Vilfredo Pareto, that specifies an unequal relationship between inputs and outputs. The principle states that, for many phenomena, 20% of invested input is responsible for 80% of the results obtained. Put another way, 80% of consequences stem from 20% of the causes.
  4. Pareto Principle

    A principle, named after economist Vilfredo Pareto, that specifies an unequal relationship between inputs and outputs. The principle states that, for many phenomena, 20% of invested input is responsible for 80% of the results obtained. Put another way, 80% of consequences stem from 20% of the causes.
  5. Budget Deficit

    A status of financial health in which expenditures exceed revenue. The term "budget deficit" is most commonly used to refer to government spending rather than business or individual spending. When referring to accrued federal government deficits, the term "national debt” is used.
  6. Floating Exchange Rate

    A country's exchange rate regime where its currency is set by the foreign-exchange market through supply and demand for that particular currency relative to other currencies. Thus, floating exchange rates change freely and are determined by trading in the forex market.
Trading Center