Weekend Economists Salute the 99% September 26-28, 2014

[xchrom]

28. SEC ALLEGES $129M PYRAMID SCHEME IN CHINA, US

http://hosted.ap.org/dynamic/stories/U/US_SEC_GLOBAL_PYRAMID_SCHEME?SITE=AP&SECTION=HOME&TEMPLATE=DEFAULT&CTIME=2014-09-26-18-06-26

WASHINGTON (AP) -- U.S. regulators have charged two companies and three individuals with operating a pyramid scheme that made some $129 million from preying on investors in China, Taiwan and the U.S.

The Securities and Exchange Commission announced the civil fraud charges Friday against eAdGear Holdings Limited, based in Hong Kong; California-based eAdGear Inc.; and Charles Wang, Qian Cathy Zhang and Francis Yuen. A federal court in San Francisco authorized the SEC's request to freeze the defendants' assets and bar them from soliciting investors.

An attorney representing Wang, Zhang and Yuen didn't immediately respond to a request for comment.

The SEC said eAdGear claimed to be a successful online marketing company, but nearly all its revenue came from investors, not products or services. Starting in December 2010, the company sold "memberships" and "business packages," opening accounts with tens of thousands of mostly Chinese investors.