Items filtered by date: September 2017

Items filtered by date: September 2017

Items filtered by date: September 2017
Friday, 15 September 2017 18:03

OLN Sponsors the ALB In-House Counsel Summit

On Tuesday the 12th of September 2017, OLN sponsored the ALB In-House Counsel Summit held at the Conrad Hotel. Big thank you to our Partners Richard Healy, Chris Hooley and Anna Chan; as well as Senior Associate Carmen Tang, Associate Jonathan Lam and Consultants Adelina Wong and Gary Wong for volunteering and representing OLN.

This was a great opportunity for OLN to increase our brand presence among in-house counsels and other legal practitioners — as well giving our members the chance to network and be a part of the various workshops.

There were approximately 500 attendees that registered for the different workshops throughout the day; with heavy foot traffic passing our booth situated outside the Grand Ballroom. We were in contact with a variety of guests; many of which were interested in our practice areas and particularly our mints and golf tees!

We hope to build on the success of this event for the upcoming 2017 In-House Congress Hong Kong on the 10th of October 2017 at the Marriott Hotel where Partner, Anna Chan will be delivering a presentation on “Cybersecurity and Data Privacy”. More details to follow.

Published in Announcements Category
Tuesday, 05 September 2017 18:50

OLN Supports Action Asia Kayak Event

It was all smiles on Saturday at the annual Action Asia Kayak 'n' Run event with many children from Hong Chi Winifred Mary Cheung Morninghope School being excited to be taken out on a kayak course with experienced instructors for short little races around Deep Water Bay. They all thoroughly enjoyed the outdoor experience and the rare taste of nature, before enjoying lunch at a nearby restaurant. OLN has supported Action Asia for many years and thank you to those that volunteered on the day.


Published in Other

In 2012, Bill Ackman, founder and CEO of U.S. hedge fund, Pershing Square, made a US$1 billion trade “against” Herbalife, a global multi-level marketing (“MLM”) company, listed on the New York Stock Exchange, by “shorting” its shares. 

He also alleged that Herbalife’s market practices effectively made it a global pyramid scheme, where distributors were misled by illusions of great returns, but where the reality was a product that would not sell on the open market and distributors who regularly lost money.

Herbalife’s response was to restate the fact that they offered healthy products and an opportunity to “change one’s life” by becoming a distributor.

Herbalife’s “distribution” structure had already attracted investigation by many entities, most recently by the U.S. Federal Trade Commission (“FTC”). That resulted in a 2016 settlement, with Herbalife being fined US$200 million and agreeing to change its business model.

After the “short” on Herbalife, several other investors, notably Carl Icahn went “long” on Herbalife stock, attacking Ackman’s short position, showing that Herbalife had much support, not only from its investors, but also self-servingly from its own distributors.

MLMs tend to do well where there are minority communities, with people within a community selling to each other and trying to recruit each other.

It seems that in an MLM structure, it is only the top-level that gets huge profits, and such a structure disturbs “normal” economic order and affects social stability. This is the rationale from the Chinese government as to why MLMs were banned in China, in 2005.

The visible enforcement of this prohibition in China is shown by the fact that only recently have there been large-scale coordinated raids by Chinese police and local government officials, where over 1200 people have been arrested on suspicion of having links to a pyramid scheme in southern China, involving over US$50 million.

In Hong Kong, MLMs do legally exist and conduct business, but consumer protection comes from the Pyramid Schemes Prohibition Ordinance (Cap. 617) (the “Ordinance”). The Ordinance provides a legal definition of a “pyramid scheme”, such a scheme requiring the following characteristics:

i) New participants must make a payment to existing participants or promoters of the scheme;
ii) New participants are being represented regarding the prospects of receiving payment once they join the scheme (the “recruitment payment”); and
iii) The “recruitment payment”, as its name suggests, is entirely or substantially derived from the new participants finding further new participants to join the scheme.

Typically, the practical difficulty will be in deciding whether a “legitimate” MLM actually has “pyramid” scheme elements.

Section 5(2)(a) of the Ordinance provides the offence of “participating” in a pyramid scheme, so the risk is to identify whether each MLM business model is actually legitimate.

In various common law jurisdictions, there have been investigations and prosecutions for involvement in pyramid schemes, but as yet no one has targeted any listed MLM claiming that it is a pyramid scheme, although self-servingly people who lose money in those MLMs often make such claims.

Caution needs to be exercised when making any investment, and when deciding to participate in any marketing scheme.

OLN’s Corporate and Commercial Department regularly offer legal advice regarding investment decisions. If you have any specific questions, please do not hesitate to contact Jade Tang at

Published in Corporate & Commercial