Eric has served in leadership positions in a number of high profile, complex financial lawsuits. He has been recognized as a Daily Journal, among the Top 100 Super Lawyers in Northern California, and a Law360 MVP for Consumer Protection.
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Key Differences between Ponzi Schemes and Pyramid Schemes
Although the terms Ponzi scheme and pyramid scheme are often used interchangeably, there are some important differences between them:
- Getting Involved
Ponzi scheme participants typically believe they invested in an actual security, and are unaware that they are involved in a Ponzi scheme. Although pyramid scheme operators often conceal the true nature of the scheme, participants are typically aware that they are responsible for recruiting new members, and that new members are a source of profit for existing members.
- Level of Involvement
After their initial investment, Ponzi scheme participants are not actively involved in the scheme. Pyramid schemes require more active involvement, as existing participants are required to recruit new participants to contribute to the scheme.
- Source of Payments
In both Ponzi schemes and pyramid schemes, existing investors are compensated by the contributions of new investors. Ponzi scheme participants believe they are earning returns from their investment, while pyramid scheme participants are aware that they are earning money by recruiting new participants.
- How Long it Takes to Collapse
Ponzi schemes can often take many years to collapse, provided there are sufficient numbers of investors. A good example of this is the Ponzi scheme operated by Bernie Madoff for over 30 years. Pyramid schemes typically collapse quickly, due to the rapid growth required to sustain them.
Our Reputation for Excellence
Girard Gibbs’ financial fraud and securities lawyers have more than two decades of experience prosecuting fraud. Our attorneys have successfully litigated against some of the largest companies in the United States, and we have recovered more than a billion dollars on our clients’ behalf.
We have fought some of the most complex cases brought under federal and state laws nationwide, and our attorneys have been recognized with numerous awards and honors for their accomplishments, including Top 100 Super Lawyers in Northern California, Top Plaintiff Lawyers in California, The Best Lawyers in America, and rated AV Preeminent (among the highest class of attorneys for professional ethics and legal skills).
Our Securities Arbitration Team
David’s advocacy has generated major recoveries for consumers impacted by financial fraud. He was named to the Top 40 Under 40 by Daily Journal and a “Rising Star in Class Actions” by Law360.
Michael has over 20 years of experience representing individuals in complex cases involving banking credit card and other financial frauds.
Amanda represents employees, consumers and investors in complex class action lawsuits throughout the country. She previously served as a law clerk to the Honorable Richard A. Paez, United States Court of Appeals for the Ninth Circuit, and to the Honorable Claudia Wilken, Northern District of California.
Noteworthy Financial Fraud Cases
|American Express Financial Advisors Securities Litigation||$100 million cash settlement for clients alleging American Express steered them into under-performing “shelf space funds” to reap kickbacks|
|Chase Bank “Check Loan” Litigation||$100 million settlement for consumers alleging Chase offered long-term fixed-rate loans, only to later more-than-double required payments|
|Peregrine Financial Group Customer Litigation||Settlements worth $75 million for futures and commodities investors who lost millions in the collapse of Peregrine Financial Group, Inc.|
|NantHealth||Court-appointed Co-Lead Counsel in a securities class action alleging the company’s founder violated federal securities law and artificially inflated stock prices|
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