TIME

U.S. Officials Bust Pyramid Scheme Promoted on Facebook

To match Special Report SEC/INVESTIGATIONS
A general exterior view of the U.S. Securities and Exchange Commission (SEC) headquarters in Washington, June 24, 2011. Jonathan Ernst—Reuters

An alleged fraudulent investment scheme was frozen by court order, as the U.S. Securities and Exchange Commission said the company behind the ploy had been "exploiting investors" by investing into various securities for minutes at a time

The U.S. Securities and Exchange Commission has taken swift action against two companies deemed to be effectively operating a pyramid scheme on both Facebook and Twitter, according to USA Today.

A federal court paved the way this week for the body to freeze the accounts of Fleet Mutual Wealth and MWF Financial, which operated under the name Mutual Wealth.

Federal officials claimed the front company exploited social media users on Facebook and Twitter, who were promised returns of 2% to 3% a week in accordance with a “strategy that invests into securities for no more than a few minutes.”

The Commission claims the firm lied about investing clients’ money and was transferring the capital to offshore bank accounts.

[USA Today]

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