Pyramid Schemes and Multi-Level Marketing

Testimony on “Oversight of the SEC’s Division of Enforcement” Read the entire testimony by clicking on the title.

Andrew Ceresney, Director Division of Enforcement

March 19, 2015

The staff also has recently seen what appears to be an increase in pyramid schemes[6] under the guise of “multi-level marketing” and “network marketing” opportunities.[7]  These schemes often target the most vulnerable investors, and social media has expanded their reach.  The Division is deploying resources to disrupt these schemes through a coordinated effort of timely, aggressive enforcement actions along with community outreach and investor education.  We are also using new analytic techniques to identify patterns and common threads, thereby permitting earlier detection of potential fraudulent schemes.