The prohibition of pyramid schemes does not amount to a prohibition of all multi-level marketing (MLM). Tupperware lawfully sells storage and serving products branded with its name and the well-known “burp” on the one hand. It also lawfully offers to some individuals the right to offer its products to other potential customers in return for initial entry costs (in effect, purchasing a Tupperware franchise) on the other. That much is uncontroversial. Nor is the sale of a Tupperware franchise a security requiring registration as such. Where controversy begins to enter the picture is when these individuals are themselves empowered to sell the right to sell the product to third parties, creating another downstream level, and where the second level retailer not only thereafter gets a commission from the sale of the company’s products herself; she gets a share of the downstream profits: she shares in the proceeds of sales made by individuals she recruited to be sales people. This k...