PONZI SCHEME AND ITS PREVENTION:INSIGHTS FROM MALAYSIA

  • Eley Suzana Kasim Universiti Teknologi MARA, Shah Alam
  • Norlaila Md Zin Institute of Leadership and Development, Universiti Teknologi MARA
  • Hazlina Mohd Padil Universiti Teknologi MARA Cawangan Negeri Sembilan
  • Normah Omar Universiti Teknologi MARA, Shah Alam

Abstract

Ponzi scheme is a fraudulent investing schemes which promises high rates of return with little risk to investors. The scheme has led to substantial amount of financial leakages in recent years. Despite warnings by the law enforcement agencies and various alerts by regulators, many have unfortunately fallen for such schemes. Hence, the current measures are limited in preventing the fraudulent schemes. Therefore, the present study aims to present key insights into the modus operandi, profiles of fraudsters and victims as well as prevention measures undertaken by regulators and law enforcement agency in Malaysia. This study employs a qualitative methodology involving semi-structured interviews and document reviews to collect data. Interviews with regulators, enforcers, and victims revealed that the emergence of digitally promoted modus operandi in recent years posed new challenges to both regulators and enforcers to detect and prevent Ponzi schemes. Additionally, education is the best approach to ensure effective preventive strategy which needs to be supported by a specific regulation on Ponzi scheme. With a new law, better enforcement could lead to more effective prevention of the fraud. Findings of this study is expected to provide recent evidence on Ponzi schemes and valuable insights for future development of preventive measures.
Published
Dec 28, 2020
How to Cite
KASIM, Eley Suzana et al. PONZI SCHEME AND ITS PREVENTION:INSIGHTS FROM MALAYSIA. Management & Accounting Review (MAR), [S.l.], v. 19, n. 3, dec. 2020. ISSN 2550-1895. Available at: <http://arionline.uitm.edu.my/ojs/index.php/MAR/article/view/1381>. Date accessed: 24 sep. 2021. doi: http://dx.doi.org/10.24191/mar.v19i3.1381.