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
by Smriti Parsheera and Suyash Rai.
Attack of the ponzi schemes
The Saradha Group has gained notoriety in recent weeks with outstanding public deposits reportedly exceeding Rs.200 billion. There was anger and panic. The state government has stepped in with partial redress.
As we watch this saga unfold, there may be another crisis waiting . . . → Read More: Correctly defining the scope of financial regulation so as to block ponzi schemes