Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : The Residential Real Estate Crash Index -- Ignore unavailable to you. Want to Upgrade?

To: SGJ who wrote (151363)	9/27/2008 9:12:19 PM
From: neolib	Respond to of 306849

Yes, but not necessarily a Ponzi, matrix or pyramid scheme. MLM is not inherently illegal. So again, we differ only on definitions. I suggest you pay more attention to that. I clearly pointed out that MLM is not by itself a scam, via Amway as an example. The distinction between Ponzi, matrix or pyramid is not of much interest to me, but as I noted in my previous post, there are technical differences, so mybad if my sloppiness alarmed you. I wonder if you have an extensive subcategorization of the above since the difference interests you greatly? What is a matrix scheme when the payout is interest on your investment along with some token of value, rather than a token and a chance at a more valuable item? That is what I was suggesting with a grain of sand or your 1 share of IBM. Would not that be more Ponzi than Matrix as I said? I believe it would be. Don't you want to berate me for failure to understand that such a scam is not actually either Ponzi or Matrix, but instead, A Type I Financial Interest Matrix Scheme (you make up a name)! LOL! For your edification from the wikipedia entry on Matrix Scheme: A matrix scheme, also known as a Matrix Site, Elevator Scheme, Escalator Scheme or Ladder Scheme, is a business model involving the exchange of money for a certain product with a side bonus of being added to a waiting list for a product of greater value than the amount given.[1] Matrix schemes are also sometimes considered similar to Ponzi or pyramid schemes. .... The operation of matrix schemes thus resembles Ponzi schemes: money from newly arriving investors is taken and used to pay off the return to existing investors. [4] Matrix scheme operators often claim that the sale of the "token product" obviates them from any blame for fraud or gambling, arguing that the person knowingly paid for that item alone and receiving the reward item is essentially a free bonus to which a buyer has no right or expectation. However, the token product alone could not be reasonably sold for the price listed, and as such legal experts claim that, regardless of what is said, the real product being sold is the "reward" in question in those situations. Steven A. Richards, a lawyer who represents multi-level marketing (MLM) companies for Grimes & Reese in Idaho Falls, Idaho, has stated that often there are no clear legal tests for Ponzi schemes. But if the product sold has no value or very little value, and consumers wouldn’t buy it without the attached free gift, the scheme probably runs afoul of federal and state laws.[4]