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Stan is an investment manager. He has received money from various investors with a promise of very high returns on their investments. The invested money is not supplying enough capital in order to pay the returns promised so he has started using new investor's money to pay older investors. By advertising and by word of mouth, people are anxious to invest with Stan because of the money being paid and with the influx of new investors he is able to continue operating. Stan is. (a) operating a Ponzi scheme, (b) guilty of conspiracy to defraud, (c) racketeering, or (d) operating an insider trading operation.

Operation Management, Management Studies

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