As if we didn’t get enough angst out of the financial markets crumbling due to the sub prime crisis, another scandal that rocked the financial circles was the “Ponzi scheme” run by former Nasdaq chairman, Bernard Madoff, that finally came tumbling down and that cost investors an estimated $50 Billion.

Ponzi scheme basically takes in money from investors and pays them off with money acquired from the next batch of investors. Aptly simplified as robbing Peter to pay Paul. This scheme will work as long as new investors are always coming in and the old investors do not pull out their money. The scam all boils down to trust!
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