Not sure if what you put down is actual fraud or just bad business...
As an example... back in the 80s many banks were failing... people would say 'these guys should go to jail'.... my response was 'stupid is not illegal'... IOW, if the person did not break a law (as you suggest, he was using the greater fool theory which is not illegal), then you just had a bad investment and were not defrauded....
Just saying there is a difference....
You are of course correct. A Ponzi scheme is not the same as someone fraudulently promoting a very highly leveraged product as a conservative, sound and safe investment.
However IMO it misses the point, that the techniques used by the con artist involved, and the effects on the investors are the same. In both cases they are likely illegal, some being more difficult to prosecute than others.
And in both, a small minority can gain, but the vast majority will eventually loose all or most of their investment.
Most of the people on this site are very sophisticated and know that there is no one and no technique that will beat the market long term, and that any product with a higher than normal rate of return is accompanied by large and possibly very large risk.
Most of us here are by now pretty much immune to this kind of con. But we got that way over time and by experience. (Experience meaning making mistakes and learning from them) My 20s something self was certainly not aware of all of this (although if you would have asked me then, I pretty much thought I knew it all).
This is what I think are the important points. The con may differ, but the techniques and results are the same, we are not as smart as we think, and experience is a great teacher, but better early than late.
Just as an aside to your other point about bad banks failing in the 80s. I was a shareholder in some of these local banks. Their stock price had been shooting up (manipulated OTC rises on a few hundred shares at a time). All of them failed to some degree or another, most being bought out at pennies on the dollar, some just going bankrupt outright. In every case of which I am aware, they went bankrupt through insider self dealing. Local business people would set up a local bank because it was an easy way to get loans for their pet risky projects. These banks were just a form of bad business.
Or were they?
The original stock prices were highly manipulated. I didn't know it at the time, my young self again. But a 5% stock rise on a few hundred shares would certainly tip me off now. My broker, whom I had great confidence in eventually went to jail.
I think more times then we like to belive some of these "bad businesses" are really cons themselves.
"Just saying there is a difference...." Yes sometimes, but it is not always clear.