The Financial Sector Conduct Authority of South Africa has issued a pyramid scheme fraud notice to the Prosperity Grid. “Several complaints received from the public” sparked the Prosperity Grid probe. According to the FSCA, the Prosperity Grid “appears to be a pyramid scheme whose functioning is prohibited” after a preliminary review. The FSCA is, unfortunately, a financial regulator.
We have closed our investigation because pyramid schemes are not covered by the FSCA, but we nevertheless advise the public to be cautious.
In the case of MLM, this means they’d only investigate if there was evidence of securities fraud.
Even so, the FSCA has a history of dragging its feet when it comes to apparent securities fraud. In any case, the FSCA has done something – even if it’s simply passing the buck – and that’s a good thing.
The FSCA has forwarded the matter to other relevant regulators and authorities in South Africa, who will evaluate it and, if necessary, take further action. The Prosperity Grid was assessed by us before. We discovered a simple giving program that relied on pyramid recruitment to stay afloat.
We saw the prosperity grid was failing last month. This was due to a reduction in admission fees from $500 to just $126. The Prosperity Grid’s website receives very little traffic.
This indicates that the scam has most likely failed, leading to complaints to the FSCA.
As we said in our evaluation, the Prosperity Grid is run by South Africans and largely targeted at South Africans.