Colombian regulator warns Wealth Generators is a pyramid scheme
Wealth Generators launched in 2013 and are based out of Utah in the US.
The company operates in the financial services MLM niche, with a specific focus on stock market trading.
Recently the Wealth Generators has caught the attention of Colombia’s Superintendencia Financiera regulatory body, who claim it’s a pyramid scheme.Superintendencia Financiera made the claim in a December 16th warning against the company.
According to Superintendencia Financiera, Wealth Generators’ business model ‘has features typical (of a) pyramid scheme‘.
The Superintendency was able to verify that the mentioned company offers to pay “benefits” represented in money, to affiliates that fulfill the requirement of recruiting more people who contribute their monetary resources, which is the only source of money that sustains the pyramid.
The success (of Wealth Generators) depends on the recruitment of more affiliates who contribute money to keep the pyramid growing in geometric progression.
Superintendencia Financiera reiterate that pyramid schemes are illegal in Colombia, with participants potentially opening themselves up to criminal liability:
The Financial Superintendence calls on the public not to fall into businesses that promise high returns or exorbitant income, as they run the risk of becoming involved in illegal activity and participate in pyramid schemes.
What prompted Superintendencia Financiera’s warning is unclear. At the time of publication Colombia does not appear to be a major source of traffic to the Wealth Generators website.
BehindMLM reviewed Wealth Generators back in 2014. I concluded the company operated in the grey with respect to its trading advice product.
If Wealth Generators affiliates were the primary purchasers of the subscription product, there was also the potential for autoship pyramid recruitment. This seems to be what Superintendencia Financiera have latched on to.
What a weak statement/warning by the Colombians. Not sure what they are referring to as a Ponzi as this is a trading service that you can either learn how to trade/ follow traders, etc..
Sure there is a referral comission but what industry does not offer that??
If the service is not working, then people dont stay and pay..
Superintendencia Financiera didn’t allege Wealth Generators was a Ponzi…?
Only the MLM industry pays out across multiple levels. And when you’re paying recruitment commissions at the expense of retail, you’re operating a pyramid scheme.