They investigate a series of companies involved in fraudulent operations based on the Ponzi scheme

The National Securities Commission (CNV) reported that it is investigating a number of companies for the possible performance of legal acts with negotiable securities without proper authorization from the agency, which could involve fraudulent operations based on Ponzi schemes.

“These companies are characterized by making various offers of investments in cryptocurrencies, credits, non-regulated investment funds, foreign exchange and others, ensuring extraordinary monthly or annual returns,” the CNV warned in a statement.

The offer is made through its own websites, journalistic media, multiple social networks and with the promotion or sponsorship of public figures.

“The clear objective is to attract small investors for these assets without making available sufficient information about their nature and the risks they entail. For this reason, the CNV invites the general public, and investors in particular, to carefully analyze the nature of the investment to make and properly weigh its risks; instead of being guided only by the advice of famous people,” the entity warned.

The Commission urged citizens “to be cautious around investment offers” that present the following warning signs of possible fraud:

– Guaranteed high returns, risk-free, “too good to be true”

– Additional benefits for recruiting new clients or giving access to your network of contacts

– Sponsorship and testimonials from famous people, athletes or influencers through social networks, who appeal to their personal experiences with the company and emotional issues

– The company and its vendors/promoters are not registered with the CNV to make this type of offer

Therefore, the investing public must, before placing money in any of these offers, verify if the company is a registered agent with the CNV (https://www.cnv.gov.ar/sitioWeb/RegistrosPublicos/Agentes) and if the Sponsors are suitable personnel before the agency to be able to provide advice in an authorized manner (https://www.cnv.gov.ar/SitioWeb/RegistrosPublicos/Idoneos).

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Last week, the non-governmental organization (NGO) Bitcoin Argentina denounced before the Office of the Attorney for Economic Crime and Money Laundering (Procelac), the main managers of the Holding Generation ZOE, among which Leonardo Cositorto stands out, for the possible commission of crimes of fraud, unauthorized public savings capture and market manipulation.

“There are sufficient elements for the justice system to investigate and verify whether, through coercive coaching, educational training and finances, those who run this business group carried out a fraud known as a ‘Ponzi Scheme’ or pyramid scheme, in addition to other possible crimes such as unauthorized savings capture and market manipulation,” the organization said.

The complaint filed with Procelac warns of “the possible commission of the crimes defined in articles 172, 309 and 310 of the National Criminal Code” and charges “by virtue of the complexity of the facts to anyone who is criminally responsible for crimes against property and against the economic order indicated”.

Prior to this complaint, the CNV announced that it had initiated an administrative investigation against the company Generación ZOE SA, Universidad del Trading SA and Leonardo Nelson Cositorto and issued an international alert “for the possible execution of a public offer and irregular intermediation in the field of capital market”.

The Ponzi scheme is a fraudulent investment operation that involves paying interest to investors on their own invested money or the money of new investors. This scam consists of a process in which the profits obtained by the first investors are generated thanks to the money contributed by themselves or by other new investors who are deceived by the promises of obtaining, in some cases, great profits. The system works only if the number of new victims grows.

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Although similar systems had been created before, the name of this scheme comes from the Italian Carlo Ponzi and the scam he carried out in 1920.

Carlo Ponzi was an Italian émigré who came to the US in the 1920s. Shortly after being in his new country, he discovered, thanks to a mail he received from Italy, that international postal reply coupons could be sold in the United States more expensive than abroad, so the exchange rate would end up produce profit. As the rumor spread, many decided not to stay out of business and supported Ponzi with capital.

Ponzi convinced friends and associates to support his system initially, offering a 50% return on investment in 45 days. Some people invested and then got what was promised within the agreed time frame. The news began to spread, and the investment average began to grow. Ponzi hired agents and paid generous commissions for every dollar they could bring in. In February 1920, Ponzi made about $5,000, equivalent to $58,000 today.

By May 1920, he had raised some $420,000. Ponzi began depositing his money at the Hanover Trust Bank of Boston (a small Italian-American bank on Hanover Street and mostly north of Italian Street), hoping that over time he might become president. of the bank or could impose its decisions on it; he actually managed to control the bank by buying its shares.

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In July 1920 he already had millions. Many people sold or mortgaged their homes in the hope of earning high interest rates. On the 26th of that month, a large part of the plan began to sink after the Boston Post questioned the practices of the Ponzi company. Finally, the company was intervened by the State, which stopped all the new fundraising. Many of the investors angrily demanded their money, at which point Ponzi returned their capital to those who requested it, causing a considerable increase in popular support for him, with many proposing that he enter politics. Ponzi’s emporium and dreams grew even larger because he even planned to run a new type of bank, in which profits would be shared equally between shareholders and those who put money into the bank. He even planned to reopen his company under a new name “Charles Ponzi Company”, whose main objective was to invest in companies around the world.1

The federal government of the United States finally intervened Ponzi and, his scam discovered, he was sent to jail but had to be released since he paid his bail in two different prisons and decided to continue with his system, convinced that he could sustain it. Very soon the system fell and the savers lost their money. Most people did not get the benefits, many of whom reinvested their money in the scam. Ponzi, although he was sent back to Italy and despite his scam being exposed, was hailed by many as a benefactor.