Ponzi scheme: The Dutch Supreme Court on the special duty of care of banks towards third parties

The Italian American Charles Ponzi (1882-1949) became famous for his ingenious way of supposedly providing investment services and making good money out of it. The ‘trick’ was to promise investors a very high return and then, instead of actually investing their money, paying out using the incoming funds contributed by subsequent investors. Although this ‘Ponzi scheme’ was named after Charles Ponzi, this fraudulent activity has a longer history. Montague Tipp, a character in Dickens’ novel Martin Chuzzlewit (1844) already ran a similar scheme. Recently, a Ponzi scheme again became world news through the fraudulent activities of Bernard Madoff. Our small country has also produced a similar swindler: Mr. Van den Berg. In 2006 a Dutch court sentenced Van den Berg to a term of imprisonment of five years for (among other things) committing fraud.

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