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India: Suicides Mount In Investment Ponzi Scheme

indiaNew York (HedgeCo.Net) –  A director at a investment company based out of West Bengal, India has been killed and there have been 11 suicides among the victims of the scam reported so far, including a 16 year old wage-labourer who had invested in the scheme.

The founder of Saradha Group, Sudipta Sen, is currently in police custody, following the revelation that his venture fund was nothing more than a Ponzi scheme that is estimated to have duped hundreds of thousands of Indian investors out of billions of dollars.

Sen’s Saradha Group operated a series of companies that offered ‘depositors’ the ability to invest in a wide range of ventures ranging from real estate to motor vehicles to even bio gas.  Investors were offered the ability to make short-term investments with promised returns based on the duration.PonziTraker reports. “There are tales of bribes paid to politicians, a factory where workers pretended to work to impress potential investors, and a mastermind so opposed to having his picture taken that his website simply features a picture of an empty chair in his stead.”

Market regulator Securities and Exchange Board of India (Sebi) has launched prosecution in 59 cases of Collective Investment Scheme (CIS), while the ministry of corporate affairs (MCA) is also investigating the Saradha Group.

In other new, Sebi has asked domestic hedge funds to sign an undertaking they will not invest in foreign exchange derivatives as a condition for approving their registration application to reduce speculation in the currency market.

“Allowing domestic hedge funds to participate in the currency derivatives market could add more volatility to the currency market and harm the rupee’s stability.”

Alex Akesson
For HedgeCo.net
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