by Renuka Sane.
Retail finance in India is once again in the news for reasons of fraud, this time in the form of the Saradha Group in West Bengal. There is a general sense that such schemes proliferate because of the failure of financial inclusion, and that better supervision by current regulators will bring . . . → Read More: Mis-selling: from impressions to evidence
Addressing ponzi schemes: the three parts of the solution strategy There is a great deal of moral outrage about ponzi schemes. Parliament is being asked to “do something!”. We have seen this movie in India before. Laws are enacted as a knee-jerk response to an event. Quick and dirty responses are poorly thought through, . . . → Read More: Addressing ponzi schemes: the three parts of the solution strategy
by Suyash Rai and Smriti Parsheera
The first task in dealing with ponzi schemes is correctly defining the scope of financial regulation. Once a firm is classified as a financial service provider, the appropriate regulator must choose a regulatory strategy for it. Assuming SEBI had clear jurisdiction with Sahara or MMM, what would SEBI . . . → Read More: Regulatory strategy for savings/investment schemes, that would address ponzi schemes
by Shubho Roy.
What has happened?
SEBI was investigating Saradha for more than 3 years before the deposit schemes of the company collapsed (See here). Saradha seems to have used two methods to delay the investigation:
When SEBI asserted its authority to stop Saradha group from collecting money, Saradha challenged the jurisdiction of SEBI . . . → Read More: Investigating ponzi schemes: A malady