A federal court has pushed the SEC's fraud case against OnPassive toward the negotiating table instead of the courtroom.

An October 11th court order sent the dispute to mediation, giving both sides fourteen days to pick a mediator and set a date. The move buys time before trial, currently scheduled for June 2025. That same day, the court acknowledged the parties hadn't yet agreed on who would mediate.

OnPassive fired back four days later with a Motion to Dismiss. The company argued that its business model—whatever the SEC claims—simply describes a standard multi-level marketing program that courts have repeatedly ruled lawful. OnPassive's lawyers want the case thrown out entirely.

But the SEC has a sharper point. OnPassive operated with zero retail customers. That's not a gray area. That's the textbook definition of a pyramid scheme. You can't call something a legitimate MLM when the only money flowing through the system comes from recruits buying in, not from actual customers buying actual products.

The company's dismissal motion sits with the court. No timeline exists for a ruling, and both sides will likely watch the docket closely for movement.

By late October, the parties had settled on a mediator. Mediation was scheduled for May 10th, 2024. That session happened as planned, but neither side reached a settlement. The case remained unresolved. The court ordered mediation to continue at some point before June 2025, leaving the door open for a deal to materialize before the trial kicks off.

What happens next depends on whether these two sides can find middle ground. If they can't, a jury will decide whether OnPassive defrauded its participants—and whether the company's structure was actually a scheme designed to enrich the people at the top while leaving everyone else holding empty bags.

🤖 Quick Answer

What is the current status of the SEC's fraud case against OnPassive?
A federal court ordered the dispute into mediation on October 11th, requiring both parties to select a mediator within fourteen days. The trial remains scheduled for June 2025. OnPassive subsequently filed a Motion to Dismiss, arguing its business model constitutes lawful multi-level marketing, while the SEC contends the company operated without retail customers.

What distinguishes OnPassive's business model according to the SEC's allegations?
The SEC identifies a critical distinction: OnPassive conducted business operations entirely without retail customers, which represents a fundamental departure from legitimate multi-level marketing structures. This absence of retail activity indicates potential fraudulent characteristics rather than standard commercial practices repeatedly validated by courts.

How has OnPassive responded to the SEC's allegations?
OnPassive filed a Motion to Dismiss, arguing that its business model, regardless of SEC claims,

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