Legal Question in Business Law in Texas

Are matrix-type websites legal?

I have stumbled across several matrix websites such as: http://www.ezexpo.com/. These websites sell ''ebooks'' for various amounts of money. When you purchase an ebook or kit, you are entered into a matrix for a product for free.

For example, Joe goes to one of these websites and purchases and ebook with a free gift entry into a matrix for a plasma TV listed at $4,000. He pays $400 for the ebook and a spot in this list.

How the matrix (list) works is that if Joe is the first on the list, he will receive the plasma TV after the 10th person pays as well. The second person to buy the product will receive there tv when 20 people buyin. The thrid will receive theres once the 30th persons buys-in. and so on and so on...

Is this legal? They do sell a ''product'' whcih is an ebook which is available around the web for about .50, but is sold for $10 up to $500?

Why isn't it legal? Are there any ''loop holes'' these websites can use for it to be in the USA?

I want to know that what I'm investing in is legal.


Asked on 3/06/03, 3:05 am

1 Answer from Attorneys
Peter Bradie Bradie, Bradie & Bradie

Re: Are matrix-type websites legal?

You will need to also invest in legal counsel to do some substantial research into what sounds a bit like a Ponzi scheme. Only then can someone tell you if you're investing in a legal enterprise or not.

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Answered on 3/06/03, 9:51 am


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