The regulators seem to be doing better catching smaller Madoff-like schemes lately, as the case of Guy Albert de Chimay shows.
De Chimay allegedly traded on a Belgian aristocratic background to get acquaintances to invest at least $6 million in his non-registered advisory practice.
The SEC doesn't speculate much about his heredity, but focuses on the fact that investor money went to subsidize his lifestyle, pay personal debt, and especially repay early investors who wanted to cash out -- the classic sign of a Ponzi-style arrangement.
What's interesting here is that De Chimay was "only" promising returns of 12%. That's well below what the index funds have been making in recent years.
Have expectations dropped so much? Or were there other claims involving risk-free investing?
Either way, he's now banned from the industry for life.