Page:Pyramid Schemes Prohibition Ordinance (Cap. 617).pdf/4

Pyramid Schemes Prohibition Ordinance A1377 Section 4 4. Matters to be considered by court in schemes involving marketing of goods or services

(1) To determine, for the purpose of this Ordinance, whether a scheme that involves the marketing of goods or services (or both) is a pyramid scheme, a court must have regard to the following matters in determining whether a participation payment under the scheme is entirely or substantially induced by the prospect held out to a new participant of entitlement to a recruitment payment—
 * (a) whether the participation payment bears a reasonable relationship to the value of the goods or services that the new participant is entitled to be supplied with under the scheme, having regard to the price of comparable goods or services available elsewhere;
 * (b) the relative emphasis given in the promotion of the scheme to the new participant’s entitlement—
 * (i) to the supply of goods or services; and
 * (ii) to a recruitment payment.

(2) Subsection (1) does not limit the matters to which the court may have regard in determining whether a participation payment is entirely or substantially induced by the prospect held out to a new participant of entitlement to a recruitment payment.

5. Offences in relation to pyramid scheme

(1) A person who knowingly promotes a pyramid scheme commits an offence.

(2) A person who—
 * (a) participates in a pyramid scheme;