Poof Go the Profits

A pyramid scheme collapses, infuriating investors and triggering the country's worst free-market crisis

Elsewhere, savvy investors might have smelled a rat earlier. But this was postcommunist Russia, where capitalism is wild, woolly and new. The come-on, in any event, had been slick and seductive: pervasive TV commercials that wafted visions of apartments in Paris and vacations in California, and preposterous returns of 2,000% annually with no minimum investment. With those tactics, it did not take long for 5 million Russians to pour money into the offices of the MMM investment firm, the country's biggest and best-known stock fund.

Then came the painful lesson: things too good to be true usually aren't. Last week investors...

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