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FutureNet Agrees to Settle FTC Charges

CALIFORNIA / News and Insight on Business in the
Golden State
| THE STATE / TECHNOLOGY

April 09, 1998| Bloomberg News

FutureNet Inc. agreed to pay $1 million to settle federal charges that it ran a pyramid scheme that recruited distributors of Internet access devices that are sold more cheaply in stores. The settlement with the Federal Trade Commission bars the company, Chairman Alan Setlin and President Chris Lobato from engaging in similar conduct. The $1 million, equal to about 7% of FutureNet's total stock value, will be used to repay investors who bought the distributorships and lost money. Investors were lured to the scheme with promises of a windfall, the FTC said. The income the company promised came from fees paid by newly recruited distributors, not from actual sales of products, the FTC said. Shares of Valencia-based FutureNet fell 19 cents to close at $1.63 on the Nasdaq bulletin board.

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