The Rs 2,300 crore Speak Asia scam, the Rs 1,700 crore Aryarup scam and now the Rs 500 crore Stock Guru scam - all these involved duping investors with fantastic get-rich-overnight-by-doing-nothing promises. Experts, however, opine it may be just the tip of the iceberg. Many more get-rich-quick schemes are cropping up daily, offering flimsy promises to investors. At least 329 of them are now under the government scanner.
Since they do not require a huge investment, they keep popping up time and again. Most such companies, though registered and present in big cities, operate more commonly in rural areas. The founders usually rope in initial investors to start the company followed by big compensation plans to rope in more investors. The initial investors are compensated to build credibility by using the money invested by investors prior to them. But the company finally reaches a point where its payout promises are greater than the money coming in. Usually the “business” goes bankrupt, with the investors losing their hard-earned money.
The Finance Ministry is currently evolving a system to check such Ponzi multi-marketing schemes by companies.