What is insider trading?

Insider trading is the buying or selling of a security by an insider, that is, someone who has access to information about the security not yet available to the broad public; this practice can be illegal or legal, depending on when the insider makes the trade. For example, legal insider trading can happen when the … Continue reading What is insider trading?

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What is a stock exchange?

A stock exchange or stock market is the physical or virtual place where the issuing and trading of shares takes place. The stock market is one of the most important components of an economy, as it provides companies with capital in exchange for giving investors partial ownership of the firm. Stock markets can be split into two … Continue reading What is a stock exchange?

What is the Securities and Exchange Commission?

The Securities and Exchange Commission, better known as SEC, is a US independent, federal government agency responsible for protecting investors and maintaining fair and orderly functioning of securities markets. Created in 1934 with the Securities Exchange Act, after the Great Depression started in 1929, as the first federal regulator of financial markets in the United States, … Continue reading What is the Securities and Exchange Commission?

What is a hedge fund?

A hedge fund is an alternative investment vehicle that employs numerous different strategies in order to achieve a positive return, called "alpha", for its investors. These kind of funds are actively managed and they usually make use of derivatives and high leverage with the goal of enhancing profits from trades. Hedge funds are generally only accessible … Continue reading What is a hedge fund?

What is a Ponzi scheme?

A Ponzi scheme is a fraudulent investing system promising high rates of return with little risk to investors. In brief, a Ponzi scheme generates returns for older investors by acquiring new investors. In this, a Ponzi scheme is similar to a pyramid scheme, since both are based on using new investors' funds to pay the earlier ones. Companies that engage … Continue reading What is a Ponzi scheme?

Bernard Madoff

Bernard Lawrence "Bernie" Madoff (1938-alive), usually simply known as Bernard Madoff, is an American fraudster and a former hedge fund manager and financier. He is famous for being the author of the greatest financial fraud of all times, the so-called Madoff Investment Scandal, happened in 2008 at the peak of the Great Recession. In the past, … Continue reading Bernard Madoff

Bernie Madoff and the greatest financial fraud of all times

Bernard "Bernie" Madoff was a well-respected hedge fund manager, founder of a successful investment company named Bernard L. Madoff Investment Securities, LLC and, for a period of time, Chairman of the NASDAQ. In 2008, at the peak of the Great Recession, Madoff admitted to his sons who worked with him at his firm that the company was … Continue reading Bernie Madoff and the greatest financial fraud of all times