Government launches public consultation on proposals to eradicate pyramid schemes

The proposed amendments are as follows: (a) to define "pyramid scheme" as a scheme in which new participants make a payment, and such a payment is entirely or substantially induced by the prospect that they will be entitled to receive a benefit for the introduction of new participants, irr...

Full description

Saved in:
Bibliographic Details
Published inHong Kong Government News
Format Newsletter
LanguageEnglish
Published New Delhi Athena Information Solutions Pvt. Ltd 07.12.2010
Subjects
Economic development
Fraud
Pyramid operations
Hong Kong
Online AccessGet full text

Cover

More Information
Summary:The proposed amendments are as follows: (a) to define "pyramid scheme" as a scheme in which new participants make a payment, and such a payment is entirely or substantially induced by the prospect that they will be entitled to receive a benefit for the introduction of new participants, irrespective of whether the scheme involves any sale or marketing activities; (b) to curb the proliferation and expansion of pyramid schemes, we propose that persons who induce other persons to join, with the knowledge that the benefits they may receive are entirely or substantially derived from the introduction of further new participants, should be subject to criminal sanctions, just as those who knowingly establish, advertise or manage pyramid schemes; and (c) to enhance the deterrent effect, the maximum penalty prescribed should be increased from a fine of $100,000 and imprisonment for three years, to a fine of $1,000,000 and seven years in prison.