Measuring Legal Protection for Investment in the Indonesian Capital Market

The Global Comparative Perspective

Abstract

The instability of economic development and the spread of COVID-19 have severely affected the ability of most Indonesians to earn a living. Investment scammers often exploit this condition by offering a form of business that offers enormous profits with rapid returns, usually using a Ponzi scheme. This paper examines the legal aspects of enforcing the law against Pyramid and Ponzi schemes in Indonesia. All the information was collected from secondary sources, including books, journals, legal documents and court decisions of case law related to fraudulent investment. The findings indicate that the Indonesian Criminal Code carries out the prosecution of fraudulent investment in Indonesia, specifically Article 378 on Fraud, Law No. 8 of 1995 on Capital Market, Law No. 10 of 1998 on Banking, in conjunction with Law No. 21 of 2008 on Islamic Banking, and other related laws and regulations. However, the purpose of these laws is to punish the perpetrators rather than protect the victims' rights. As a result, most victims have been unable to withdraw their funds from the investment companies. As a result, a significant amount of public money is lost or cannot be recovered due to insufficient legal protection over society's investment in the market.