Pyramiding (Noun)
Meaning
A fraudulent business practice involving some form of pyramid scheme e.g., the chain of distribution is artificially expanded by an excessive number of distributors selling to other distributors at progressively higher wholesale prices until retail prices are unnecessarily inflated.
Classification
Nouns denoting acts or actions.
Examples
- The securities commission warned investors about the dangers of pyramiding schemes that promise unusually high returns with little risk.
- Pyramiding was alleged to be at the heart of the company's business model, which relied heavily on recruiting and rewarding new distributors.
- The investigation found evidence of a massive pyramiding operation that had bilked millions of dollars from unsuspecting investors.
- Pyramiding was the main reason for the company's rapid growth, but it also led to its downfall when regulators began to take a closer look.
- The court found the company guilty of pyramiding and ordered its executives to pay fines and restitution to the affected investors.