Dr. Chetan Sanghvi, Managing Director in NERA’s Antitrust and Competition Practice, recently published the article “We Need A Law To Recognize And Combat Pyramid Schemes” in Law360. In his expert analysis, Dr. Sanghvi explains the need for well-crafted protective legislation and assesses the proposed Anti-Pyramid Promotional Scheme Act of 2017, introduced by US Congressional Representatives Marsha Blackburn (R-TN) and Marc Veasey (D-TX).

Dr. Sanghvi explains how this type of fraud causes large-scale economic damage when consumers, wary of being caught in a scheme, shy away from legitimate direct sellers. The Blackburn-Veasey bill has the potential to stem this damage by isolating, and identifying as fraudulent, the activities that differentiate pyramid schemes from above-board direct selling companies. Language similar to the Blackburn-Veasey bill was passed as part of the appropriations package by the US House of Representatives in September 2017, and efforts are under way to introduce a similar bill in the US Senate.