Always in style, these swindles promise high returns to investors, but the only people who consistently make money are the promoters who set them in motion, using money from previous investors to pay new investors. Inevitably, the schemes collapse. Ponzi schemes are the legacy of Italian immigrant Charles Ponzi. Redeeming the CD early may result in large losses upwards of 25 percent of the original investment. Her intention, she told her broker, was to use the money to pay her mother s nursing home bills.
Regulators say sellers of callable CDs often don t adequately disclose the risks and restrictions.
Originated as a way to help the gravely ill pay their bills, these interests in the death benefits of terminally ill patients are always risky and sometimes fraudulent. The insured gets a percentage of the death benefit in cash, investors get a share of the death benefit when the insured dies. Because of uncertainties predicting when someone will die, these investments are extremely speculative. In a new twist, Pennsylvania regulators say senior settlements interests in the death benefits of healthy older people are now being offered to investors. Prime bank schemes.