CNV Denounces Generation ZOE S.A., University of Trading S.A., and Leonardo Nelson Cositorto for Possible Ponzi Scheme
The Comisión Nacional de Valores (CNV) has launched an administrative investigation against Generación ZOE S.A., Universidad del Trading S.A., and Leonardo Nelson Cositorto, due to suspicions that they have been running a fraudulent operation similar to the Ponzi scheme.
What is a Ponzi Scheme?
A Ponzi scheme involves paying interest to investors using money from new investors, rather than actual investments. The scam continues to operate as long as it attracts new victims who invest their money. The name “Ponzi” comes from Carlo Ponzi, an Italian immigrant who ran a similar scam in the United States in 1920.
The History of Ponzi
Carlo Ponzi was born in Italy in 1882 and emigrated to the United States in 1903. In 1920, he created a system that promised to return double or triple the amount invested within a short period. Ponzi convinced friends and acquaintances to support his scheme, including many people who invested their savings.
However, the scam was uncovered when the Boston Post questioned the practices of Ponzi’s company. The authorities intervened, stopping all new money inflows. Ponzi returned capital to those who requested it, causing a significant increase in public support for him.
Despite the scam, Ponzi continued with his scheme and even planned to manage a new type of bank. He was sent to prison but managed to escape by paying his bail. He was eventually deported to Italy, where he was found to have been involved in a similar scam in Canada.
CNV Warns Investors
The CNV is warning investors to be cautious of any offer that seems too good to be true. “It’s important to be prudent and not fall for promises of excessive benefits,” said a CNV official.
The investigation is ongoing, and new revelations are expected about the activities of Generación ZOE S.A., Universidad del Trading S.A., and Leonardo Nelson Cositorto.
Takeaways
- Be cautious of any investment offer that seems too good to be true
- Research the company and its history before investing
- Don’t invest more than you can afford to lose
- Report any suspicious activity to the authorities