Ponzi scheme

A Ponzi scheme is a fraudulent investment operation where the operator, an individual or organization, pays returns to its investors from new capital paid to the operators by new investors, rather than from profit earned by the operator. Operators of Ponzi schemes usually entice new investors by offering higher returns than other investments, in the form of short-term returns that are either abnormally high or unusually consistent.

Ponzi schemes occasionally begin as legitimate businesses, until the business fails to achieve the returns expected. The business becomes a Ponzi scheme if it then continues under fraudulent terms. Whatever the initial situation, the perpetuation of the high returns requires an ever-increasing flow of money from new investors to sustain the scheme.

The scheme is named after Charles Ponzi, who became notorious for using the technique in 1920. The idea, present in novels (for example, Charles Dickens' 1844 novel Martin Chuzzlewit and 1857 novel Little Dorrit each described such a scheme), was actually performed in real life by Ponzi who with his operation took in so much money that it was the first to become known throughout the United States. Ponzi's original scheme was based on the arbitrage of international reply coupons for postage stamps; however, he soon diverted investors' money to make payments to earlier investors and himself.

Charles Ponzi

Charles Ponzi (March 3, 1882 – January 18, 1949) was an Italian businessman and con artist in the U.S. and Canada. His aliases include Charles Ponci, Carlo and Charles P. Bianchi. Born in Italy, he became known in the early 1920s as a swindler in North America for his money-making scheme. He promised clients a 50% profit within 45 days, or 100% profit within 90 days, by buying discounted postal reply coupons in other countries and redeeming them at face value in the United States as a form of arbitrage. In reality, Ponzi was paying early investors using the investments of later investors, a practice known as "robbing Peter to pay Paul." While this swindle predated Ponzi by several years, it became so identified with him that it now bears his namesake. His scheme ran for over a year before it collapsed, costing his "investors" $20 million.

Ponzi was probably inspired by the scheme of William F. Miller, a Brooklyn bookkeeper who in 1899 used the same scheme to take in $1 million.

Bernard Madoff

Bernard Lawrence "Bernie" Madoff (/ˈmeɪdɒf/; born April 29, 1938) is an American fraudster and a former stockbroker, investment advisor, and financier. He is the former non-executive chairman of the NASDAQ stock market, and the admitted operator of a Ponzi scheme that is considered the largest financial fraud in U.S. history.

Madoff founded the Wall Street firm Bernard L. Madoff Investment Securities LLC in 1960, and was its chairman until his arrest on December 11, 2008. The firm was one of the top market maker businesses on Wall Street, which bypassed "specialist" firms by directly executing orders over the counter from retail brokers. He employed at the firm his brother Peter, as Senior Managing Director and Chief Compliance Officer; Peter's daughter Shana Madoff, as the firm's rules and compliance officer and attorney; and his sons Andrew and Mark. Peter has since been sentenced to 10 years in prison and Mark committed suicide by hanging exactly two years after his father's arrest. Andrew died of lymphoma on September 3, 2014.

Khan Academy

Khan Academy is a non-profit educational organization created in 2006 by educator Salman Khan with the aim of providing a free, world-class education for anyone, anywhere. The organization produces short lectures in the form of YouTube videos. In addition to micro lectures, the organization's website features practice exercises and tools for educators. All resources are available for free to anyone around the world. The main language of the website is English, but the content is also available in other languages.

History

The founder of the organization, Salman Khan, was born in New Orleans, Louisiana, United States to immigrant parents from Bangladesh and India. After earning three degrees from the Massachusetts Institute of Technology (a BS in mathematics, a BS in electrical engineering and computer science, and an MEng in electrical engineering and computer science), he pursued an MBA from Harvard Business School.

In late 2004, Khan began tutoring his cousin Nadia who needed help with math using Yahoo!'s Doodle notepad.When other relatives and friends sought similar help, he decided that it would be more practical to distribute the tutorials on YouTube. The videos' popularity and the testimonials of appreciative students prompted Khan to quit his job in finance as a hedge fund analyst at Connective Capital Management in 2009, and focus on the tutorials (then released under the moniker "Khan Academy") full-time.

Kevin Bacon

Kevin Norwood Bacon (born July 8, 1958) is an American actor and musician whose films include musical-drama film Footloose (1984), the controversial historical conspiracy legal thriller JFK (1991), the legal drama A Few Good Men (1992), the historical docudrama Apollo 13 (1995), and the mystery drama Mystic River (2003). Also on television, he starred in the Fox series The Following from 2013 to 2015. Bacon has won a Golden Globe Award and three Screen Actors Guild Awards, and was nominated for a Primetime Emmy Award. The Guardian named him one of the best actors never to have received an Academy Award nomination. In 2003, Bacon received a star on the Hollywood Walk of Fame.

Bacon has become an icon for the concept of interconnectedness (as in social networks), having been popularized by the game "Six Degrees of Kevin Bacon". In 2007, he created SixDegrees.org, a charitable foundation.

Early life and education

Bacon, one of six children, was born and raised in a close-knit family in Philadelphia. His mother, Ruth Hilda (née Holmes; 1916–1991), taught at an elementary school and was a liberal activist, while his father, Edmund Norwood Bacon (May 2, 1910 – October 14, 2005), was a well-respected architect and a prominent Philadelphian who had been Executive Director of the Philadelphia City Planning Commission for many years.