American Greed: Madoff Behind Bars

Quiz: QUIZ: Ponzi Schemes

Question 1 of 10

Which of the following is not a warning sign indicating a Ponzi scheme?

  1. High investment returns with no risk
  2. Overly consistent returns
  3. Overly simple investment strategies
  4. Unregistered investments

The website of the Securities and Exchange Commission offers a seven-point list of things to watch out for that may indicate a Ponzi scheme, and "overly simple investment strategies" does not appear on that list. In fact, one of the things to watch out for is a secretive or complex investment strategy. According to the site, "Avoiding investments you don't understand or for which you can't get complete information is a good rule of thumb."

SOURCE: Ponzi Schemes – Frequently Asked Questions | U.S. Securities and Exchange Commission