The SEC has filed suit against Le Club Prive, an Internet club, offering advice and recommendations about investments to its members. The suit alleges that the club’s pyramid scheme is a “sham” operation and all assets of the club have been temporarily frozen. A temporary restraining order has halted all club activity.
Members of Le Club Prive paid $1,495 to join plus a $149 monthly fee. Members could purchase unregistered shares in mutual funds that promised big returns, and received investment advice. The pyramid feature of the club involved recruitment of new members. Recruit a new member and you receive $500.
The SEC is seeking return of the investors’ money and additional relief. Named defendants in the suit have been unavailable for comment.