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Thursday 19 January 2017
MMM Nigeria Ponzi Scheme And The Curse of ‘Herd Mentality’
What Is A Ponzi Scheme?Business Dictionary aptly defines a Ponzi scheme as a SCAM in which a GULLIBLE
group is enticed with the promise of very high returns in a very short time,
but is actually based on paying off the early 'investors' from the cash from
(hopefully ever increasing number of) new 'investors.' Investopedia reconciles a Ponzi scheme with a pyramid
scheme in that both are based on using new ‘investors'
funds to pay earlier participants. Essentially, such schemes are synonymous
Peter to Pay Paul’’. A typical Ponzi scheme flops when the cash
outflow exceeds the cash inflow. Ponzi scheme is named after Charles Ponzi
(1882-1949), an Italian immigrant to the United States who, during 1919-20
collected more than fifteen million dollars from some 40,000 enthusiastic depositors
by promising to double their investment in 90 days.
the above explanation, anyone still in doubt that MMM Nigeria and similar
platforms are patent Ponzi schemes?
MMM Nigeria Crises
resuming operations on 13 January 2017 from a one month ‘coma’ (recall that MMM
Nigeria shut down operations on 14 December 2016), the Ponzi scheme keeps
vacillating, changing the goalpost at the middle of the match. Despite
participants providing help with hundreds of thousands and millions of Naira,
MMM Nigeria says only ‘poor’’ participants will be processed in the interim.
Subsequently, N31,000 was set as the maximum withdrawal limit. Monies of those
who ‘’provided help’’ (PH) running into hundreds of thousands of Naira are
‘trapped’ in the system thereby fuelling aspersions and frenzy.
Beggar’s belief how folks stake hundreds of
thousands, millions of Naira on a Ponzi scheme in the guise of changing the
world despite SALIENT warnings,
disclaimers on the MMM website which include:
are no guarantees and promises! Neither explicit nor implicit.
are neither investments nor business! Participants help each other, sending
each other money directly and without intermediaries. That’s all!
are no securities transactions, no relationship with the professional
participants of the securities market; you do not acquire any securities. (Do
you need them? :-))
are no rules. In principle! The only rule is no rules. At all! Even if you
follow all of the instructions, you still may "lose". "Win"
might not be paid. Without any reasons or explanations.
general, you can lose all your money. Always remember about this and
participate only with spare money. Or do not participate at all! Amen.
the fact that MMM founder - Sergei Mavrodi is a convicted Russian fraudster, series
of point-blank warnings on MMM
Nigeria website and repeated warnings by Nigeria’s Securities and Exchange Commission (SEC), seemingly
educated but gullible, greedy, diehard adherents of MMM (Mavrodians as they
call themselves) vouch for the schemes legitimacy, credibility and champion it
as ‘god sent’. When reminded of the inherent risks, dyed-in-the-wool Mavrodians
retort - ‘’I stand with
MMM’’, ‘’is it your money’’, ‘’you are jealous’’. I now see how easy it is to
sell ice to the Eskimos. Mavrodians claim they want to ‘’change the world’’ by providing
help (as philanthropists wey dem be) to total strangers. Question is, in the
absence of the 30% interest that MMM pays, how many participants will ‘’provide
help’’ of say two million naira to a stranger? Where does the 30% ‘interest
come from? Brazen greed camouflaged as benevolence!
MMM’s Trail of Sorrow, Tears And Blood
One Tobechukwu Okeke, a final year student of Agricultural
Engineering of the University of Nigeria, Nsukka (UNN), who is also reported to
be an MMM participant committed
suicide. A Benue State indigene identified as
Adekole reportedly attempted suicide after losing N750, 000 meant for his forthcoming
wedding to the MMM Ponzi scheme. The Vice Chancellor of Osun State University,
Prof. Labode Popoola, asserted that some students of the school invested their tuition fees in
MMM leading to the over N2bn debt students owe the school.
Factors Fuelling Ponzi,
Sports Betting Schemes in Nigeria
One of our problems in Nigeria is that original ideas are not
common. Open a barber shop today in your street and start to rake in turnover, multiple
shops spring up soonest offering the same service. This is why there’s proliferation
of Ponzi schemes, sport betting platforms in Nigeria. In some families, parents
and children are involved and "compare notes’’. Indirectly, such parents tell
their wards that money can be earned without some effort (physical or
intellectual)? Remind me if the likes of Bill Gates, Mark Zuckerberg, Dangote,
Mike Adenuga, Cosmas Maduka (Coscharis) became billionaires through Ponzi
schemes, sports betting? High rate of unemployment, job losses, economic
recession, ignorance and herd mentality are some of the factors blamed for the
proliferation of Ponzi and sports betting platforms in Nigeria.
Variants of Ponzi, Sports
Betting Platforms Doing Business in Nigeria
As we say, Nigerians no
dey carry last! My research unveiled about 18
get-rich-quick, ‘’Rob Peter To Pay Paul’’ Ponzi schemes ‘doing business in
Nigeria’. They include: MMM Nigeria (www.nigeriammm.net), MMM Express, MMMBTC Online, NNN Nigeria (www.nnn-office.com) Get Help Worldwide,
GHW (www.gethelpworldwide.com), Zar fund (www.zarfund.com), E-cooperative online, Givers forum (www.giversforum.net), Crowd rising (www.crowdrising.net), Icharity (www.icharity.club), Ultimate cycler (www.ultimatecycler.com), MegaCycler, RevoSquad, MutualGrant, Invest Cash Out (ICO),
Digital Portal Club, TwinKas, DonationHub, MySureCash, ExEarn, amongst others.
Similarly, sports betting platforms in Nigeria include: Nairabet, Merrybet and
Bet9ja, Bet365Naija, LovingBet, BetColony, WinnersGoldenBet, StakersDen, 360Bet, 1960Bet, Surebet247, Baba Ijebu, amongst
What is 'Herd Instinct or Mentality?'
A herd instinct or mentality is a phenomenon symptomatic of a lack
of individual thoughtfulness, decision-making, causing people to think and act
in the same way as the majority of those around them. Powerful emotions of
fear, superstition, greed and envy, peer pressure, co-workers, community and
religious leaders, media spin; anonymity of social media and the internet
subconsciously drive people to herd instinct. Herd mentality is also referred
to as: Bandwagon effect, Collective intelligence, Conformity, Crowd psychology,
Group intelligence, Groupthink, Herd behavior, Monkey see, monkey do, Peer
pressure, group or mass hysteria.
Herd mentality in Finance,
In finance, a herd instinct relates to instances where investors
settle for the same or similar investments primarily because many others are investing
in such. Participating in MMM can be likened to herd mentality. Herd instinct
could be blamed for bubbles in the stock market. As Daniel J. Howard, a
marketing professor at Southern Methodist University, aptly puts it, “Stock
market bubbles and crashes are caused by herd mentality. It’s scary to me
because we make our own heaven, and we make our own hell.” Another area where
this phenomenon exists is in sporting events. Some people support some clubs or
teams because of one sentiment or the other - their friends, colleague’s or
family memberssupport them or even
because the club is an underdog.
Herd Mentality in Politics
There’s also an element of herd mentality in politics. Sometimes
people are sympathetic to certain politicians, candidates not because of their
credentials, attributes but because of emotions, sentiments or simply because
other people around them support such candidates or because such a candidate is
been intimidated by the opposition. Many Nigerians were sympathetic to Rotimi
Amaechi then not because he’s a saint but because they perceived he was been hounded
by the Jonathan administration. People were surprised how Ayo Fayose trounced sitting
governor – Kayode Fayemi despite the later seen to be more cerebral. During the
debate as to whether or not APC presidential candidate - General Muhammadu
Buhari possessed requisite minimum academic qualification - O’ levels to
contest the 2015 presidential elections, some Nigerians boasted they would
still vote for Buhari even if he presents a NEPA bill as his school
certificate. Now they know better. Despite the plethora of faux pas credited to
him including his infamous “grab
them by the pussy” gaffe made by Trump, diehard
supporters –women and men resolutely stood by him. Herd mentality possibly
swayed the Brexit referendum despite overwhelming evidence that exiting the EU
would affect the UK.
Nigeria is fast losing the confidence, trust many participants reposed in the
scheme. Mavrodians are increasingly reluctant to ‘’provide help’’ (PH) and potential
converts are cagey. The die is cast. The end is imminent. As my Yoruba pals
will say, MMM = Mokun Mogbe Modaran. Early entrants and MMM guilders made a killing when the
going was good. Many guilders reportedly got streams of help (GH), outrageous bonuses running into
millions of naira from their downline but seldom provided help (PH).Taking risks isn’t bad but being foolhardy
is.Beware of herd mentality.Wisdom is knowing when to
move on. In Igbo we say, – ‘’onye aghogburu ka agbara’’.
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