Ponzi Update

March 26, 2009

Remember Millennium Bank, the Ponzi scheme in St Vincent & the Grenadines? Well, the SEC has finally noticed it, which means that non-bloggers can now accuse it of being a Ponzi too.

Meanwhile, Alan Stanford is implausibly saying that he wasn’t running a Ponzi scheme at all:

"He’s not a swindler," Stanford’s lawyer, Dick DeGuerin, said in a phone interview today. "This isn’t a Ponzi scheme. He was able to pay back every investor until the regulators came in like storm troopers."

Hear that, Stanford investors? It wasn’t Alan Stanford who stole your billions, it was the regulators! I do wonder where they put the money.

And my 5pm meeting at the Portfolio offices today with a hedge fund accused of being a Ponzi was cancelled at the last minute, so it seems they’re not going to come in and show me their audited accounts after all. I’m afraid, however, that this one needs some actual reporting before I can write more about it: the fund’s lawyers have teeth and aren’t afraid to bare them. But even if this particular fund turns out to be kosher, be assured there are a lot more Ponzis out there. If you see something with suspiciously consistent and positive returns, and if you have no idea how those returns are generated, then tread with extreme caution.

Reprinted from Portfolio.com

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