6 men to be charged for MLM and pyramid scheme in Singapore and Malaysia
UPDATE: This article has been amended to reflect that certain multi-level marketing schemes are allowed under certain prescribed conditions.
Six men aged between 32 and 57 will be charged on Wednesday (4 July) for their suspected involvement in a fraudulent multi-level marketing (MLM) and pyramid scheme.
This follows a Commercial Affairs Department (CAD) investigation into a scheme offered by a Singapore company to investors in Singapore and Malaysia between 2014 and 2015, said the police in a news release.
Investors received high returns, purportedly from the company’s trading of leveraged foreign exchange. They were also told that they could receive commissions based on the trading activities of those they directly recruited, as well as those of new investors recruited by those they brought in.
A pyramid scheme typically involves paying participants who each recruit more members into the scheme, with returns being given to early participants using money contributed by later ones.
The six men will be charged for fraudulent trading, promoting a prohibited MLM scheme and/or not possessing the requisite Capital Markets Services Licence for carrying out leveraged foreign exchange.
The various charges carry penalties of fines of up to $200,000 along with possible jail terms of up to seven years.
Members of the public are advised not to deal with unregulated trading platforms, said the police. It is also unlawful to promote or participate in an MLM or pyramid scheme, except under certain prescribed conditions.
It is also forbidden to carry on business in any regulated activity without a Capital Markets Services Licence issued by the Monetary Authority of Singapore, unless otherwise exempted or excluded.
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