Ponzi operandi: Affinity fraud risk for shari'ah-compliant investment funds

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Title Ponzi operandi: Affinity fraud risk for shari'ah-compliant investment funds
Author Nathie, Mahmood; Drew, Jacqueline Mary; Drew, Michael Emmanuel
Journal Name ISRA International Journal of Islamic Finance
Year Published 2012
Place of publication Malaysia
Publisher International Shari'ah Research Academy for Islamic Finance (ISRA)
Abstract Ponzi schemes using the principles of affinity fraud are a real and current risk for Islamic investors. This paper examines the use of affinity fraud in targeting the Islamic community and analyses Shari’ah norms that seek to protect people from fraud and cheating. Using case studies from three countries, the paper identifies the common traits pervasive in Ponzi schemes including legal ruses aimed at circumventing the Shari’ah interdiction on interest and other proscriptive acts by unscrupulous and fraudulent operators. The examination shows that the nascent Islamic finance market should be vigilant of copycat schemes that have the potential to undermine the industry. Like other affinity frauds, there is the need to develop early warning systems aimed at preventing, or at least minimising, the prevalence of such schemes in the Islamic financial industry.
Peer Reviewed Yes
Published Yes
Publisher URI http://www.isra.my/publications/journal-english.html
Volume 4
Issue Number 1
Page from 7
Page to 37
ISSN 0128-1976
Date Accessioned 2012-07-31
Language en_US
Research Centre ARC Centre of Excellence in Policing and Security
Faculty Arts, Education and Law
Subject Criminology; Finance
URI http://hdl.handle.net/10072/47013
Publication Type Journal Articles (Refereed Article)
Publication Type Code c1

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