SEC Shuts Down Pyramid Scheme Targeting Asian-Americans
The Securities and Exchange Commission recently shut down a pyramid scheme that “purportedly sold Internet-based children’s educational courses.” Promoters of “CKB” and “CKB168” snookered 400 investors in the US to pony up $20 million, with millions of dollars more raised in countries with significant Asian populations. The majority of the money, the SEC claims, went to the executives of CKB and promoters of the pyramid scheme; there was little to no evidence that real-world consumer sales were being made.
From the SEC press release:
“CKB’s operators and promoters profited by abusing relationships of trust within the Asian-American community and promising investors they can earn more money by recruiting other investors instead of selling actual products,” said Antonia Chion, an associate director in the SEC’s Division of Enforcement. “What CKB really sells is the false promise of easy wealth.”
The SEC also released an investor alert with more information on how consumers can educate themselves on pyramid schemes that masquerade themselves as multi-level marketing companies.