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In May 2019, the FBI arrested a group of mafia leaders for a series of scams that cost investors millions. The claim was that the mob bought large stakes in small companies and then bribed and coerced brokers to promote the stocks at inflated prices. This is known as _____.

Sagot :

Lanuel

The form of illegitimate business that is being practiced by this arrested group of mafia leaders is known as a Ponzi scheme.

What is a Ponzi scheme?

A Ponzi scheme can be defined as a form of fraudulent business in which the owners lure unsuspecting victims (investors) to invest certain amount of money with the promise to pay them a certain percentage as returns, especially by taking more money from new set of investors.

This ultimately implies that, a Ponzi scheme is fostered by the payment of quick returns to the earlies investors, so as to lure other investors. Also, it may involve paying bribe and coercing brokers to promote the their stocks at inflated prices.

Read more on Ponzi scheme here: https://brainly.com/question/15078906

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