Which of the following is NOT a distinguishing characteristic of a Ponzi scheme?

Detailed Explanation:

Rationale for Correct Answer: Ponzi schemes differ from pyramid schemes. In Ponzi schemes, investors are paid returns from funds contributed by later investors, not based on recruiting new investors. Recruiting-based payouts are a characteristic of pyramid schemes , not Ponzi schemes.

Analysis of Incorrect Options:

A. Legitimate investment belief – True; victims believe the investment is genuine.

B. High returns promised – Classic Ponzi hallmark.

D. Minimal valid commerce – Ponzi promoters often fake or exaggerate legitimate investments.

Key Concept: Difference between Ponzi schemes and pyramid schemes .