The legality of pyramid schemes and other multi-level marketing schemes in Bermuda remains in question but the newly enacted Investment Business Act may now offer consumers some protection.

Cheryl Lister chairperson of the Bermuda Monetary Authority (BMA) said the Act was not constructed with pyramid schemes in mind, but admitted that it might prove helpful in some cases.

The Act compels anyone or any company carrying out investment business in or from Bermuda to be licensed by the BMA. It also provides licensing exemptions to those businesses or individuals who deal with high-end sophisticated investors.

Last year, scores of Bermudians took part in an assortment of get rich-quick schemes. The action prompted Police to conduct a probe and the Attorney General was asked by the Premier to conduct an investigation into their legality.

No legal action has resulted from the inquiries. But organisers of one of the most popular schemes altered its structure and reported that it was a "mutual assistance financial plan''.

That scheme saw thousands of Bermudians make outlays of $500, $2000 and $6000, expecting returns of $4,000, $16,000, and $48,000 after eight people signed on after them.

Mrs. Lister said that it was inevitable that some `get-rich-quick' schemes would face BMA scrutiny. But she said much of the wording used protects their activity.

"The wording of many of the pyramid schemes is becoming a bit of an issue as much of it is carefully couched with words like `loan' and `gifts','' she said.

"We are looking at any type of operation that contravenes the Act but many have just kept afoul of breaking the law through wording,'' she added.

Mrs. Lister also noted that there was a further difficulty of determining whether the schemes originated in Bermuda.

Managing director of the BMA, Munro Sutherland said the new law would not be "the most natural route for catching the generic thing called pyramid schemes''.

He explained that the product involved in the programme plays a large part on where and how it is handled and pointed out that only schemes which were seen to be mimicking or purporting to be investment operations would fall under the purview of the BMA.

BUSINESS BUC