SL Bank = Ponzi Scheme

None. But would you give your money to a random stranger to "speculate" on and hope for a phenomenal (read: too good to be true) return?

Lordfly, since you have been in SL much longer than most of the posters in this thread, what is your recollection of former SL banks going "bankrupt"?

I do. I also don't consider the owners of SL Bank as random strangers. The owner has been posting on these boards for a good while, and he defiantly knows what he is taking about. Not to mention he has posted his personal school email address, his website, pictures and a good deal more personal info on himself than ANYONE else I have ever seen on these boards or in game. It is well known by many of us who frequent the "Land & Economy" forum that the owner of SL Bank is an economist at NYU and that his bank is an experiment in Game Theory.

I think some people need to do a bit more research before posting threads which trash someone else's business/project. Isn't this against TOS? Also, the choice of title for this thread singles out SL Bank, and is thus an attack post. The original poster of this thread should have named it something like “Banks in SL…”

Tisk Tisk…

Regardless of the wisdom in letting a stranger speculate with your money, there is a VAST difference between that and the charge the OP made. And a VERY poorly founded charge at that since she ignored any means of profit generation except loans.

I think my charge still stands, NO ONE has addressed the primary question, why are these banks paying extravagant rates when they can get money much much cheaper?

Since SL Bank's accounting numbers have been presented here /130/a3/123098/1.html I would like to then question them. First off, this was neither a balance sheet nor a profit and loss sheet, more it's a confusing set of different numbers with as many important numbers missing as presented. Secondly, the asset list doesn't even make sense. None of the assets in the list generates returns at the required level, and some like "small cap stocks" sound more like buzzwords used to impress people than being reality (all stocks in SL are small cap, Linden Labs is small cap). And exactly how is "advertising" an investment (are they banking Goodwill as an asset)?

And then we have the impressive label "Amount of money in the bank". What in the heck does that mean? It's certainly not an accounting term. Actually, it looks like that number is the banks current libablities to depositors. But if so, why chose a term that looks like an asset instead of saying what it is, a liability?

The whole thing stinks IMHO.

I don't think they were posting a balance sheet. They were simply posting some stats which people were requesting, as the post stated. Small cap stocks are real world stocks. If you are good you can make many many times your investment when it comes to currency trading in the ForeX and LindeX markets. They invested in an advertising system which they have set up at their bank. It does cost money (thus an investment) to code/setup advertising space and software.

If you don't want to take the risk, then don't. I don't see any of the bank owners on here telling you that you MUST invest in their bank. High risk = high return, but then again you have a higher chance of loss. This is nothing new.

Also, you are assuming that in SL you can get money "much cheaper." Maybe people only invest money in high-risk/high return accounts in SL because the currency is considered a "luxury good." Maybe the bank has other goals than making a profit (remember SL Bank is an econ experiment.) In the real world you can find a slew of high risk/high return accounts as well. The interest they pay the depositor is based on the level of risk the deposits will be invested in. You can find higher risk stock investments which pay almost 100% but they chance of loss is high. Hell, I made almost that much in my real world Ameritrade account over the past year. It is riskier, but the return can be substantial. If a bank is going to invest your deposit in something risky, they are going to pay you higher int rate and hopefully make a big return. Int rates for all kinds of investments (in world and out) are not pegged at the same rate as a low risk real world savings account or the interest rate of a real world loan.

You may be looking at a TOS violation with your thread. In real life you'd be looking at a lawsuit. All questions which have been asked on the SLBank thread have been answered quickly and fully. You may want to post your questions there before starting an attack thread on someone else's project, and even a whole industry with assumptions which very well could be, dead wrong.

Marla, I'm not going to even try to argue, you make absolutely no sense all of the time.



I urge anyone interested in banks in SL to not go by the opinions of Marla. She has no experience with these banks, never been ripped off by them, and has absolutely no idea how they are run. You can't call something a scam if THERE'S NO ONE THAT IS GETTING RIPPED OFF! Just because you don't understand someone else's company doesn't make it right for you to call them a scam, and then blast em on the boards.


Marla, I think you're a scam because I don't know how you operate



PS... I have no affiliations with any of the banks. I depost a small amout of my money in Ginko in fact.

PPS... these are not a personal attack towards Marla, this is simply a reply to her statements on this thread.

You are absolutely 100% right! That's exactly my point. I don't know and you don't know and no one else knows! And that's one of the basic characteristics of a scam or ponzi scheme. If these businesses were honest, they would also be transparent.

I tell you what, I will humbly apologize to any of these banks that will open to their books to an independent audit and prove they are legit. Banks in RL must do so, and for very good reason. The same reasons apply to SL banks.

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If anyone here is considering investing in one of these institutions, or any SL financial vehicle, I recommend the following questions need to be asked:

- Who owns the institution (get their RL names and addresses).
- What is the nature of the investment, is it a loan or are you purchasing ownership in the business? This is an important difference, in the former case the owner of the business owes you the money irrespective of it's success, in the latter case, if the business goes under, you lose.
- If it is a loan, does the owner know his legal liabilities.
- If it is a loan, exactly what are the terms of the loan (these are ambiguous in most of the cards I read).
- If it is a loan, is it secured and if so, by what?
- If it is a purchase into the business, how are profits calculated and distributed?
- If it is a purchase into the business, what rights do you have in deciding the businesses direction (you now own part of the business)?
- What are the companies assets and liabilities (any bank or investment fund must provide this information in the real world).
- What provisions have been made to protect from fraud? Is there an independent auditing house?
- What is the businesses investment strategy and policies, i.e. how are they going to make money with your money?

Basically, what you want to look for in all these questions is both transparency of the company and understanding of the risk. If the business cannot or will not answer these questions, walk, no, run away as fast as you can.

I also recommend to everyone to do a little research of your own on Ponzi schemes.

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I don't consider it a personal attack I welcome the discussion.

See, what you are saying now, is ok. It is ok to give someone some advice about investing or what you may want to ask a bank. But the name of this thread and your original post was very different. It plainly states "SL Bank = Ponzi" which you do not know. You made assumptions on investing which was wrong.

Many of your questions have already been answered on the SLBank thread. As SL Bank, Ginko, etc are private banks, they don't have to show you anything. If you don't trust them, you don't have to invest in them. Period. This has been gone over and over time and time again on older threads about Ginko, etc. It more less comes down to; if you don't trust them or don't like the risk, don't open an account.

Many people invest in different projects in SL without knowing who the other people are in "reallife." I rent land, and I have no idea who the guy is in real life. He could take my rent money and ban me if he wanted. My friend invested in a casino with others in his "group" who he doesn't know in real life. The owner of SL Bank gave out his personal info including his name, email, school, website and even pictures. I wouldn't even do that. Who knows what nut on SL might read it. There are crazy people out there. SL is a game of trust and risk.

Also, have you thought about the fact that the banks may not want to let everyone know what their investment strategy is for obvious security reasons. It takes skill to form an investment strategy that works. You don't just hand that info out. Duhhh. I mean look at Microsoft. The EU has been asking them to make their software public for ever, yet MS won’t do it. Very similar. If you have something that works, you don’t tell everyone how to copy it.

You can't, however, come on here saying something is a scam when no one has ever been scammed by them, just because you feel it may be one.

Pan, I understand your point. Your counter arguments have some truth to them.

Yet those arguments don't negate the obvious signs that these are Ponzi's (ridiculously high returns and no transparency are two obvious signs). All of my 54 years of life experience (yes I'm that old <g> says that these are Ponzi Schemes or similar. To me at least, it is as obvious as the nose in front of my face.

But I don't insist that everyone believe me. It's not necessary. Just by my pointing this out, some will do due diligence and avoid the scam. And others may not invest as much.

One nice thing about SL is that it is a great learning environment for RL. People are going to lose money on these types of scams, but they are probably going to lose a hell of a lot less than if they were suckered in in RL. And by doing so, they will learn a life lesson

Marla, there is no saving anyone from a Ponzi scheme.

Those who already have a clue never get started, and those who won't ever get a clue can't be told.

You will be hated before the collapse and hated more later, when proven right. It's human nature.

That's the power of the scheme, and why it will still be circulating generations from now. The *entire country of Albania* suffered from such a scheme nine years ago:

http://www.crimes-of-persuasion.com/Crimes/InPerson/MajorPerson/albania_ponzi.htm



As far as the bank experiment goes - if it truly is, I hope for their sake they have ridiculously low limits on investment. Like... ten cents or less.

A coffee shop counter experiment with nickels and dimes won't be bothered with, but if even *one* person loses a few bucks and presses Ponzi scheme charges - wow.

Why anyone would dare attempt such a thing with such incredible criminal consequences boggles the mind. Ticked off US federal judges make Marla sound like an optimist.

I think that's a bit unfair. Her post makes perfect sense, she can't understand how the interest can so high, so she made a post about it. And I agree about that, it sounds very high to me as well.

The title of the thread is somewhat unfortunate, but the content makes perfect sense, IMO.



You miss a quite crucial thing here, however: in a Ponzi scheme, the people first getting into it don't get ripped off! The first ones who join get their profit, paid by the money of those joining after them. They will then be very happy about it, and tell all their friends. The whole thing only collapses after it gets to the point where it can't keep growing fast enough. But while the illusion can be maintained you will have plenty of very happy investors. In fact, not everybody necessarily loses, you can get early, double or triple your investment, then get out. Of course, the extra money you got will have been not from an ongoing business, but from some poor guy who lost all he invested.

I'm not saying it is a Ponzi scheme. But it must be pointed that if it indeed happens to be one, that nobody is getting ripped off now doesn't mean it couldn't collapse tomorrow.

One word, risk.

Say mafia loans. Sure, you might be able to get one (I doubt, but maybe) for less than 50% a year, but what happens if your business enterprise fails? Something very, very nasty. Maybe even death. Loansharks don't tend to loan too much money at a time either. If you get a more normal loan you could lose a lot as well, your house for example or you could even go into personal bankrupcy. An actual -business- loan, that only a corporation is liable for, is not an easy thing to get. A SL bank is an informal type of business loan. If your SL bank fails, it wouldn't be nice but it would also not ruin you.


One phrase, "exchange controls".

Maybe your business involves paying people outside your home country, which the government makes hard to do. So you need your financing to come from outside the country in order to bypass those controls.

That is all fine and dandy. But you never answered any of my reasons with a reply. You simply rebuffed my answers with "well, I'm an old fart, and I'm telling you this is a Ponzi" You obviously have little to no experience with investing. Your post is still simply an uneducated opinion and nothing more.

SL Bank tells you who they are, where they live, where they go to school, what they invest in, the risk level, etc. How more transparent can you get? Do you want them to get naked in front of you and show off the size of their penises? Just wondering.

At the same time, not understanding how someone runs his or her business is no excuse to call them a scam. Asking how it is possible or requesting information is one thing, but saying someone's business is a scam is something very different…

ponzi is that like Fonzy from Happy days ? Aaaaaaaaayy

Yes, and yet SL Bank tells us where who they are, their private email addresses, where they go to school, what they invest in. Why would a "ponzi" give out all that info and not just rely on the suckers?

Hey, I have to admit that some of the banks in SL are sketch central. I mean Ginko has been around for years and they STILL refuse to tell us who they are or what they invest in. SL Bank, though, has been around two months and anyone who reads the "land and economy" board knows who they are and what they do.

If it looks like a duck and quacks like a duck...

Quack quack.

And if it looks like a duck and sounds like a duck, it could never be a duck? I also just noticed that the owner of SL Bank just posted all his personal info including his address on the Land & Economy forum, again...

And has anybody verified that information? You know, it's not all that hard for me to tell you a bunch of random information. I could create a new email address not connected to my RL identity, and I could get a prepaid cell phone that wouldn't be in any way either.

Besides, read on the Ponzi guy. He was very much public. He presented it as a fully legitimate business, and was widely recognized on the streets.

I'm not saying that this necessarily is the case, but neither all the data that is available is much of a proof that it isn't.

We both agreed that both you and I do not know anything about these "banks", they are complete financial mysteries, so exactly what am I suppose to answer?

As for transparency, that comes from an independent audit of the books, not some partial unverified answers and double talk. I note that the one bank owner that is giving some answers in another thread has, despite his long postings, not provided the most basic financial information like a simple asset list, balance sheets or profit and loss sheets in order to even verify minimum characteristics of the investment. This is despite the fact that the owner of the bank has been asked to provide such information in that thread.

I invite everyone to read and evaluate the bank's responses over in /130/a3/123098/1.html How much is real bankable <g> information and how much is double talk?

And none of the other banks provide any information. Even some of their notecards don't say anything at all. I'm not sure which is scarier, no information, or inadequate information.

Simply put, an honest bank or investment fund is going to provide transparency. All RL firms provide this, and if these 'banks' were honest, they would also be providing this information.

Why do you care?

What difference does it make? do you have a vested interest in the bank or something?

Why does there have to be a vested interest? Myself, I don't really care much one way or the other, but still participate in the discussion because I find it interesting to discuss.

I'm weird like that, I read books on mythology because I simply like the subject, and not because I ever expect to derive the slightest benefit from it.

i was making the comment to the Svar Beckersted, who posted above me....