Pyramiding is a method of increasing margin by using unrealized returns from successful trades. In other words , it is a business terminology of PONZI TECHNIQUE.
3. Pyramiding is a method of increasing margin by using
unrealized returns from successful trades. In other
words , it is a business terminology of PONZI
TECHNIQUE.
SHAHZADI
NEELOFAR
4. IPR (International Postal Reply) are the coupons that are used
for small international transactions.
The recipients of such coupons could exchange them at their
local post office for stamps.
In August 1919, Charles Ponzi found that buying such coupons
in Spain and selling them in USA is profitable due to large
difference in exchange rates.
SHAHZADI
NEELOFAR
5. Established a Collected Bought IPR from
company named funds in SPAIN in
„SEC‟ DOLLARS in PESETA
USA
Extra
Proceeds
Exchange IPR in money was
were
USA to US invested in
distributed to
stamps and sold MUTUAL
investors as a
profit and them to local SAVINGS
people BANK
their capital
SAMREEN
LODHI
6. Profit from
Existing
bank and the
investors
remaining
brought new PROFIT
amount from
investors
sale of stamps
Elected himself as
a PRESIDENT of Eventually Profit used to
that mutual fund became a major buy bank‟s
bank shareholder shares
SAMREEN
LODHI
7. IPR prices rises.
Interest from the bank was the only profit he was getting,
Published an article in newspaper that company can not pay any
profit any more.
Many investors took their money out of his company.
And Attorney of Boston ordered to stop working and to audit
his company.
Audit report his scheme an illegal and he was arrested.
SAMREEN
LODHI
8. Studying ponzi‟s case , many companies adopted this scheme
and in studies it is known as PYRAMIDING i.e promising
participants payment for enrolling other people into the scheme.
Pyramid schemes are a form of fraud.
HIRA SHAHID
KHAN
9. it revolves around continuous recruiting,
the promoter collects payments from a stream of people,
promising them all the same high rate of return on a short-term
investment.
In the typical Pyramiding scheme, there is no real investment
opportunity, and the promoter just uses the money from new
recruits to pay obligations owed to longer-standing members of
the program.
In English, there is an expression that nicely summarizes this
scheme: It's called "stealing from Peter to pay Paul."
HIRA SHAHID
KHAN
10. They offer Rs 30 key chain and Rs 10 sports card,
that will be used for promoting sports activities,
and buyer will win trips to foreign, cars, mobile phones
and jewellery through lucky draw.
However, it was banned on the ground that
“Earning millions of rupees in this head by selling Hero
Cards is useless and this should be stopped
immediately until they are able to produce players of
international quality to compete such mega events.”
HIRA SHAHID
KHAN
11. Similarly TAJ Co. that prints HOLY QURAN issued their shares
for opening of new printing houses.
Many people invested their thousands of rupees to buy the
shares.
Later the offices were closed , and the shares worth zero.
SAHAR KHAN
12. In 2003, the United States Federal Trade Commission (FTC)
disclosed what it called an internet-based "pyramid scam.“
Its complaint states that customers would pay a registration fee
to join a program that called itself an "internet mall" and
purchase a package of goods and services such as internet mail,
and that the company offered "significant commissions" to
consumers who purchased and resold the package.
The FTC alleged that the company's program was instead and
in reality a pyramid scheme that did not disclose that most
consumers' money would be kept, and that it gave affiliates
material that allowed them to scam others.
SAHAR KHAN
13. Pyramiding is an illegal activity and to avoid to be a prey of such
trick, follow these 8 steps:
Find — and study — the company‟s track record.
Learn about the product
Ask questions
Understand any restrictions
Talk to other distributors
Consider using a friend or adviser as a neutral sounding board
or for a gut check.
Take your time.
Think about whether this plan suits your talents and goals
SAHAR KHAN