Since the news broke late last week that the
ACCC’s pyramid scheme case against Lyoness
had been
dismissed
, we’ve tried to piece together what we can from subsequent statements by Justice Flick and the ACCC.

Lyoness for the most part have been busy flooding the internet with hundreds of spammy press-releases celebrating the victory.

Personally my take is that the AU investment scheme wasn’t as important as it should have been in the case, which may have been in part due to a lack of evidence submitted by the ACCC.

Without the published judgement however, Justice Flick’s decision was difficult to make sense of.

The decision has now been made public, with how the ACCC lost an exercise in regulatory disappointment.

As per Section 45 of the Australian Consumer Law, the definition of a pyramid scheme is as follows:

(1) A pyramid scheme is a scheme with both of the following characteristics:

(a) to take part in the scheme, some or all new participants must provide, to another participant or participants in the scheme, either of the following (a participation payment):

(i) a financial or non-financial benefit to, or for the benefit of, the other participant or participants;

(ii) a financial or non-financial benefit partly to, or for the benefit of, the other participant or participants and partly to, or for the benefit of, other persons;

(b) the participation payments are entirely or substantially induced by the prospect held out to new participants that they will be entitled, in relation to the introduction to the scheme of further new participants, to be provided with either of the following (a recruitment payment):

(i) a financial or non-financial benefit to, or for the benefit of, new participants;

(ii) a financial or non-financial benefit partly to, or for the benefit of, new participants and partly to, or for the benefit of, other persons.

(2) A new participant includes a person who has applied, or been invited, to participate in the scheme.

(3) A scheme may be a pyramid scheme:

(a) no matter who holds out to new participants the prospect of entitlement to recruitment payments; and

(b) no matter who is to make recruitment payments to new participants; and

(c) no matter who is to make introductions to the scheme of further new participants.

(4) A scheme may be a pyramid scheme even if it has any or all of the following characteristics:

(a) the participation payments may (or must) be made after the new participants begin to take part in the scheme;

(b) making a participation payment is not the only requirement for taking part in the scheme;

(c) the holding out of the prospect of entitlement to recruitment payments does not give any new participant a legally enforceable right;

(d) arrangements for the scheme are not recorded in writing (whether entirely or partly);

(e) the scheme involves the marketing of goods or services (or both).

Before we get into Justice Flick’s decision, let me frame the
Lyoness AU inve

🤖 Quick Answer

What was the outcome of the ACCC's pyramid scheme case against Lyoness?
The Federal Court dismissed the ACCC's pyramid scheme case against Lyoness. Justice Flick ruled against the regulator's claims, leading to significant public celebration by Lyoness through numerous press releases and widespread internet promotion of their legal victory.

Why did the ACCC's case against Lyoness fail?
The case failed due to insufficient evidence and inadequate focus on the Australian investment scheme aspects. The ACCC's regulatory approach was deemed ineffective, with Justice Flick's dismissal decision highlighting significant gaps in the prosecution strategy and documentation presented.

What legal framework governed the ACCC's pyramid scheme allegations?
The allegations were pursued under Section 45 of the Australian Consumer Law, which establishes the legal definition and parameters for identifying and prosecuting pyramid scheme operations in Australia's consumer protection regulatory framework.

🔗 Related Articles

- Philippines to issue MLM companies with seals of legitimacy
- QNet affiliates busted for posing as National Security Operatives
- Austrian Public Prosecutor launches OneCoin criminal investigation
- Axiome Review: AXM token Dubai Ponzi scheme
- GrowthClub Life Review: ElevateWealth securities fraud