Securities - Accountant - Pyramid scheme.

Byline: Mass. Lawyers Weekly Staff

Where an accounting firm has been named as a defendant in a multi-district securities suit involving a pyramid scheme, the complaint is insufficient to state claims against the accounting firm under G.L.c. 93 or 93A, so the firm is entitled to dismissal.

"The Plaintiff has included [Pricewaterhouse Cooper's LLP (PWC] in the SCAC as a group that they have styled as 'Operational Defendants.' The Operational Defendants are defined in the SCAC as founders and principals, executive officers, top level promoters, and associated individuals. Those associated individuals include among others the so called 'Licensed Professionals', which includes attorneys, and accountants, including PWC. These 'Operational Defendants' are alleged to have violated G.L.C. 93 12 and 69, but there are no allegations in the SCAC identifying any conduct of PWC which is violative of these statutes.

"PWC argues that 69 of C.93 does not create liability for such a broad class of what are secondary actors because 69(d) states, 'no multi-level distribution company or participant in its marketing program shall ...' The Defendants claim that there is no evidence that they 'participated' in the multi-level marketing program. Section 69A of C.93 describes the activities that 'participants may perform, such as participating in the distribution chain for goods or services offered by the company, recruiting new participants, paying or receiving commissions, bonuses, or finder's fee.'...