Legal opinion claims USI-Tech’s unregistered securities legal in the US?
In what is shaping up the be the latest MLM attorney blunder, the law firm Hart & David have purportedly put their stamp of approval on USI-Tech.
For those unfamiliar with the company, USI-Tech initially combined pyramid recruitment with an automated forex trading platform.
USI-Tech affiliates deposited €600 EUR on the promise of an entirely automated and passive ROI.
On or around May, 2017, USI-Tech expanded their offering to include a bitcoin trading investment opportunity.
In exchange for a €50 EUR deposit, USI-Tech affiliates are promised a 1% daily ROI for 140 days (140%).
With USI-Tech actively marketing in the US and this business model setting off alarm bells, the company felt the need to address compliance concerns.
On August 28th USI-Tech held a “USA Kickoff meeting” event.
At the event USI-Tech corporate got on stage and announced the law firm Hart & David.
For reasons not entirely clear, Hart & David’s paid legal opinion of USI-Tech begins with certification that the MT4 trading software
has been looked at, has been examined and is a legal product in the United States of America, according to the FTC and SEC.
This was met with applause and cheering from USI-Tech affiliates in attendance. Which is strange, because the issue with USI-Tech’s compliance was never whether forex trading software is legal or not.
Obviously forex trading is legal in the US. The compliance issue however is USI-Tech accept 600 EUR deposits in exchange for an automated and passive ROI.
Or in other words USI-Tech are clearly making a securities offering to their affiliates.
Not surprisingly, this was not addressed in USI-Tech corporate’s stage presentation of Hart & David’s legal opinion.
The next slide presented covered USI-Tech’s 140% ROI BTC package investment offer.
In what appears to be a direct challenge to the SEC’s securities regulation, USI-Tech management assert Hart & David claim the unregistered securities offering is a “legal product”.
It has been examined by our lawyers and in their legal opinion, it is a legal product.
It is legal to sell this product as a network marketing product in the United States of America.
Whereas MT4 trading software as software code is obviously legal (not so much what USI-Tech do with it), the 140% ROI BTC packages are stand-alone.
From a regulatory standpoint, certifying USI-Tech’s BTC packages as a securities offering is straight-forward.
Affiliates deposit 50 EUR and receive a passive 1% daily ROI, capped at 140%.
In the past the SEC has clarified that, irrespective of what is or isn’t bundled with a ROI offering, the fact remains that any MLM investment offer is a security.
Other than generally referencing “case law, regulatory notes, transcripts and petitions”, on what basis Hart & David are challenging the definition of a security in the Securities and Exchange Act is unclear.
USI-Tech meanwhile is not, nor has it ever to the best of my knowledge, registered with the SEC.
Despite Hart & David representing otherwise, unregistered securities offerings are very much illegal in the US.
And if that wasn’t absurd enough, USI-Tech corporate go on to claim Hart & David even went so far as to discuss company compliance with the FTC.
Our lawyers have done all of the research necessary.
They have talked to the Federal Trade Commission and they believe, in their legal opinion, which is binding, that USI-Tech Limited is a legal network marketing company – with their two products, the forex software and the BTC package, in the United States of America.
Leave alone the fact that no US regulator discusses specific company compliance outside an official investigation, what alternative universe are Hart & David, USI-Tech corporate and their affiliates living in?
If we look to history, MLM attorneys that have gone in to bat for scams have all but destroyed their professional reputations.
In response to our continued coverage of TelexFree, Nehra even went so far as to contact BehindMLM directly and assert, in his legal opinion, that TelexFree wasn’t a Ponzi scheme.
After the SEC shut down both scams, for his efforts Nehra found himself on the receiving end of a $100 million dollar lawsuit filed by the Zeek Rewards Receiver.
Nehra settled and in the settlement agreement had to acknowledge that Zeek was a Ponzi scheme.
The TelexFree Trustee also sued Nehra who, as of June, 2016, demanded a jury trial.
With TelexFree a certified $3 billion dollar plus Ponzi scheme and its US co-founder sentenced to six years in prison back in March, trial or no trial things probably aren’t going to end well for Nehra.
Whereas Hart & David currently haven’t tangled with regulators over MLM compliance yet, it seems they’re now keen on a shot at redefining US securities law.
The Elmhurst, Illinois law firm first popped up on BehindMLM’s radar as the attorneys representing the My Advertising Pays Ponzi scheme.
In late 2015 Hart & David purportedly told My Advertising Pays that claims it was a Ponzi scheme were “defamatory and libelous speech”.
Through our research, we have found many, if not all, of these claims to be without merit.
My Advertising Pays collapsed shortly thereafter.
At the time of publication USI-Tech’s Alexa ranking suggest strong growth since the launch of the BTC investment package scheme. The US is currently the largest source of traffic to the USI-Tech website (23%).
USI-Tech itself is a shell company purportedly incorporated in Dubai, run by Joao Severino (Portugal), Horst Jicha (Europe) and Ralf Gold (Brazil).
Hopefully a full SEC investigation into USI-Tech, if it hasn’t already begun, isn’t too far off.
I for one can’t wait to see Hart & David’s legal opinions square off against established US securities law.