Nielsen v. Myers

Does disclosure of the risks inherent in a pyramid scheme exempt a program from Oregon's Unlawful Trade Practices Act?


The Oregon Court of Appeals held that awareness of the risks involved by participants does not allow it to escape the requirements of the Oregon Unlawful Trade Practices Act. NWFR operated a pure "cash-for-cash" pyramid scheme. They encouraged participants to discuss the program with others, allowed names other than those of the participants to be placed on the payout board, and made sure that the participants were aware that they scheme was risky and did not guarantee payment. The Oregon Court of Appeals held that despite these changes, the program was still regulated by the UTPA. The practices of the program were specifically designed to avoid the Act, and the Court held that mere textual evasion should not exempt a pyramid scheme in substance from regulation.

The full case and case summary are also available online at:

LOADING PDF: If there are any problems, click here to download the file.

Written by:

Published In:

Reference Info:State, 9th Circuit, Oregon | United States

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Babener & Associates | Attorney Advertising

Don't miss a thing! Build a custom news brief:

Read fresh new writing on compliance, cybersecurity, Dodd-Frank, whistleblowers, social media, hiring & firing, patent reform, the NLRB, Obamacare, the SEC…

…or whatever matters the most to you. Follow authors, firms, and topics on JD Supra.

Create your news brief now - it's free and easy »


Welcome to MLM Legal - a valuable resource to the Multi-Level Marketing and Direct Sales Industry. ... View Profile »

Follow Babener & Associates:

Reporters on Deadline

All the intelligence you need, in one easy email:

Great! Your first step to building an email digest of JD Supra authors and topics. Log in with LinkedIn so we can start sending your digest...

Sign up for your custom alerts now, using LinkedIn ›

* With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name.