Under the ruse of cloud services,
Wings Network
operated your typical MLM pyramid scheme.

Affiliates bought in for between $249 and $1499, with commissions paid on subsequent affiliate recruitment.

Launched in late 2013, troubles for Wings Network began in mid 2014. Amidst speculation of a
pending regulatory bust
, Wings Network
suspended US operations
.

On May 15th, the day after the suspension, Massachusetts
filed a pyramid scheme complaint
against the company.

October 2014 saw Nevada issue their own
Wings Network warning
, with the SEC filing their own suit in February of this year.

Yesterday saw the SEC action concluded, with Wings Network ordered to cough up $26.9 million dollars.

The
SEC’s $23.5 million dollar lawsuit
was filed against TropikGadget FZE, who the regulator claimed were behind Wings Network.

CompassWinner LDA and Happy SGPS SA, the two primary shell companies used to launder funds through, were also sued, with the SEC’s complaint also naming a number of top Wings Network affiliates (based in the US and abroad).

In a
decision
handed down on November 12th, a federal court in Massachusetts

ordered Tropikgadget to pay disgorgement of $25,213,990, representing profits gained as a result of the conduct alleged by the Commission, plus prejudgment interest of $961,742, and a third-tier civil penalty of $725,000.

The court also entered judgments by default against Compasswinner LDA (“Compasswinner”) and Happy SGPS SA (“Happy”), also of Portugal, relief defendants in the previously-filed enforcement action.

The judgments held Compasswinner liable for $8,125,235 and Happy liable for $1,102,711, representing the receipt or benefit from the use of the proceeds of violations of the federal securities laws without legitimate claim to the funds.

The case against Wings Network management and top affiliates, most of whom are based in the US, continues.

🤖 Quick Answer

What was Wings Network and how did it operate?
Wings Network was a pyramid scheme disguised as a cloud services company, launched in late 2013. Affiliates paid between $249 and $1,499 for membership, earning commissions primarily through recruiting new affiliates rather than selling legitimate products or services.

What regulatory actions were taken against Wings Network?
Massachusetts filed a pyramid scheme complaint in May 2014, followed by Nevada issuing a warning in October 2014. The SEC filed a lawsuit in February 2015, which concluded with Wings Network ordered to pay $26.9 million in restitution and penalties.

When did Wings Network cease operations in the United States?
Wings Network suspended its US operations in mid-2014, following speculation about pending regulatory action. This suspension occurred before formal complaints were officially filed by state and federal authorities.

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