Her father's status put's him in the category of extremely knowledgeable investor and she relied on he father's advice in the first instance.
The structure of the scheme was dubious ( undoubtedly non compliant) BUT the manager's stock pick was GOOD, and so after 12 months she made 9 bags on her original investment.
Schemes recommended by a friend of friend are often dubious, high risk and entirely reliant on 1) all the ducks lining up 2) the honesty of the manager and 3) pure luck. We all should know that. That said you don't sue a lucky duck that ultimately pays 10 bags!
Also and as I see it the definition of a Ponzi scheme is a scheme which siphons money from the bottom of the pyramid to pay the person at the top...... who then flies the coop. There maybe more to this case than what is pullished but from what I can see, the scheme got lucky and there were assets at the end of the day that were then used to pay profits.
