Published 16 July 2024
Reserved judgment — pyramid scheme — promotion — “pyramid selling scheme” — Fair Trading Act 1986, ss 24, 40 & 44 — Commerce Commission v Wall DC Auckland, 13 October 2000 — Commerce Commission v Alpha club NZ Limited (2002) 10 TCLR 569. The defendant faced five representative charges of promoting a pyramid selling scheme. Following complaints from the public, the prosecutor had launched an investigation into a scheme operated by the defendant. The defendant made no appearance at the proceedings but in an interview with the prosecutor had denied running a pyramid scheme. The prosecutor called two expert witnesses and also produced many pieces of video and social media evidence. The Court concluded that each element of the charges was proved. The defendant had promoted the scheme; the scheme provided for the supply of goods or services for reward; the scheme gave participants an opportunity to buy into and then on-sell an investment opportunity; and the scheme was or was likely to be unfair to many of its participants given how hard it would be for them to make money from it. The defendant had no defence and was found guilty on each charge. Judgment Date: 12 April 2024.
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