Karatbars International, a company promoting a gold recruitment scheme, received a permanent ban from operating in Canada following a November 4, 2016 court decision. The ruling also imposed administrative fines on the company and three of its key promoters for operating an illegal pyramid scheme, as found by the Autorité des marchés financiers (AMF).

The Karatbars business model involved affiliates paying a fee to join. These affiliates then earned commissions by recruiting additional members who also paid fees, presenting the arrangement under the guise of gold purchases. This structure drew early scrutiny from Canadian regulators.

The AMF first issued a public warning against Karatbars on March 20, 2014, citing concerns about its recruitment-based practices. This warning escalated into legal action, initiating a two-year court battle. On April 8, 2014, the AMF sought an ex-parte injunction against Karatbars International and four individuals: Robert Lariviere, Michel Desroches, Antoni Snopek, and Michel Galipeau.

The regulator initially requested a ban on Karatbars' promotion across Canada. It also sought administrative fines of $30,000 for the company and $5,000 for each named affiliate. A hearing took place on April 9, 2014, with a decision rendered on April 17. The court granted an injunction against Karatbars and three defendants: Robert Lariviere, Michel Desroches, and Antoni Snopek. Claims against Michel Galipeau were rejected at this stage.

The decision prompted an appeal in May 2014. A hearing was initially scheduled for May 2015. Settlement negotiations between Karatbars and the AMF continued throughout 2015, leading to the postponement of the hearing until November of that year.

On November 6, 2015, the AMF filed a revised complaint. A subsequent hearing on November 9 saw motions to dismiss from the defendants denied, allowing the case to proceed. Further hearings took place in February 2016, with both sides presenting their arguments.

Nine months later, the court delivered its final decision on November 4, 2016. The ruling sided with the AMF. The court ordered Karatbars International to permanently cease its operations and promotional activities within Canada. This prohibition fell under the provisions of the Financial Market Authority Act and the Securities Act.

The court also imposed administrative fines. Karatbars International itself was fined $3,000 CAD, equivalent to approximately $2,242 USD at the time. Robert Lariviere, Michel Desroches, and Antoni Snopek were each fined $500 CAD, or about $373 USD. These fines were levied for their roles in promoting the Karatbars pyramid scheme.

The court specifically found that Karatbars and its affiliates were offering "investment contracts" to the public. However, Karatbars lacked proper registration with the AMF, rendering these offerings unauthorized and in direct violation of the Canadian Securities Act.