BROWSE BY TOPIC
Stories of Interest
- Sarah ten Siethoff is New Associate Director of SEC Investment Management Rulemaking Office
- Catherine Keating Appointed CEO of BNY Mellon Wealth Management
- Credit Suisse to Pay $47Mn to Resolve DOJ Asia Probe
- SEC Chair Clayton Goes 'Hat in Hand' Before Congress on 2019 Budget Request
- SEC's Opening Remarks to the Elder Justice Coordinating Council
- Massachusetts Jury Convicts CA Attorney of Securities Fraud
- Deutsche Bank Says 3 Senior Investment Bankers to Leave Firm
- World’s Biggest Hedge Fund Reportedly ‘Bearish On Financial Assets’
- SEC Fines Constant Contact, Popular Email Marketer, for Overstating Subscriber Numbers
- SocGen Agrees to Pay $1.3 Billion to End Libya, Libor Probes
- Cryptocurrency Exchange Bitfinex Briefly Halts Trading After Cyber Attack
- SEC Names Valerie Szczepanik Senior Advisor for Digital Assets and Innovation
- SEC Modernizes Delivery of Fund Reports, Seeks Public Feedback on Improving Fund Disclosure
- NYSE Says SEC Plan to Limit Exchange Rebates Would Hurt Investors
- Deutsche Bank faces another challenge with Fed stress test
- Former JPMorgan Broker Files racial discrimination suit against company
- $3.3Mn Winning Bid for Lunch with Warren Buffett
- Julie Erhardt is SEC's New Acting Chief Risk Officer
- Chyhe Becker is SEC's New Acting Chief Economist, Acting Director of Economic and Risk Analysis Division
- Getting a Handle on Virtual Currencies - FINRA
We seek to provide information, insights and direction that may enable the Financial Community to effectively and efficiently operate in a regulatory risk-free environment by curating content from all over the web.
Stay Informed with the latest fanancialish news.
NEWSLETTERS & ALERTS
This ‘Cashback Membership’ Was a Ponzi Fraud
by Howard Haykin
According to the Securities and Exchange Commission (“SEC”), Saivian did not generate any revenue from the sale of POS receipts. Nor did it make any serious efforts to sell or otherwise monetize the data in its Cashback Members’ POS receipts. Instead, Saivian generated revenue almost exclusively from membership sales to Cashback Members themselves.
- Like a classic Ponzi scheme, …, Saivian satisfied promised returns to some investors - in the form of 20% cashback on shopping purchases - through the investments of other investors rather than any underlying, legitimate, commercial activity.
- Saivian was also a pyramid scheme that … required the constant influx of new investors to remain solvent. In order to keep the scheme afloat, the company urged Cashback Members to become “Affiliates” and sell Saivian Cashback Memberships to others – in exchange for additional substantial financial benefits.
Eventually, the fraud collapsed when Saivian could no longer afford the lavish lifestyle of its executives nor pay out cash rebates to all its members.
INVESTOR TAKE AWAYS. As a rule, STEER CLEAR OF deals that promise to pay out 20¢ on the dollar - they're suspect. But if you're keen on investing, seek our a trusted individual for a 2nd, unbiased opinion - even if the deal seems relatively small. If and when the deal goes bad, you're likely headed for a huge headache.