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Betting On Zero

January 29, 2021 by Lazy Man 1 Comment

There’s a lot going on in the stock trading markets nowadays with Reddit’s WallStreetBets group taking on GameStop short sellers. Brokerages like Robinhood and getting stuck in the middle of this unprecedented financial war.

I thought I’d bring back this post from almost 5 years ago about what happened when the script was flipped a bit. Back then a billionaire hedge fund manager, Bill Ackman, spotted what appeared to be a pyramid scheme, the MLM company Herbalife, operating in plain view. He shorted the stock and put forth a detailed presentation for why it was a pyramid scheme. He made it clear all the harm it was doing, especially to women and minorities. This went on for years and the stock went up and down as many people went against him to make a quick buck, just like the WallStreetBets group (but not nearly as coordinated).

Eventually, Bill Ackman was proven correct and the FTC settled with Herbalife with the biggest fine it has ever levied on another company. Alas, as part of the settlement, Herbalife got to continue on and it seems little has changed in the long term.

Today’s post is about the movie, Betting on Zero. If the WallStreetBets/Gamestop situation has your interest, I highly recommend you give it a shot. Remember that sometimes the hedge fund billionaires can use their influence to help people too.

Here is the original post from back then:

“Don’t worry. We are going to get them. We are going to get them all.” – Bill Ackman to me

A couple of weeks ago, I wrote about the idea that someone should remake The Big Short, but from the perspective of MLM/pyramid scheme fraud.

My idea wasn’t very unique. Soon after publishing the article, I realized that there was indeed a movie already out there based on Bill Ackman’s billion-dollar short of the MLM, Herbalife. The movie, Betting on Zero, has been in limited screenings at just a couple of film festivals as the producers work on full distribution. That’s one of the reasons why you probably haven’t heard of it.

Last Thursday Betting on Zero came to my neck of the woods (population 60,000) on its 4th stop. I can’t even begin to calculate the long odds that one of the biggest movies exploring MLMs would be coming to me, one of MLMs biggest critics.

We packed up the family for the long 10-minute drive. I had no idea that I’d be in for much more than a movie, but actually meeting Bill Ackman. First, there was a movie to watch. But even before that, there was controversy about the movie even existing.

The Background behind Betting on Zero

Some people might find the background behind the movie just as interesting as the movie itself.

John Fichthorn, Dialectic Capital co-founder has been following MLM since around 2004, where he claims it was sleazy and harming people. He explains that the industry has co-opted its critics, the internet, the legal system, the government, and “obviously Wall Street”, and the Federal Trade Commission.

This Fitchthorn video on CNBC is amazing:

Fichthorn says it was the FTC’s to protect consumers, and “there was nobody out there doing that anymore.” (Ahem… *waves hand*)

This became a “bee in [Fichthorn’s] bonnet” and he approached filmmaker Ted Braun to tell how consumers are getting harmed in a credible way.

He financed the movie anonymously because the industry is so litigious. It’s easy to understand why someone might want to hide when they are exposing a $150 billion dollar industry that co-opts all the groups he mentioned.

Fichthorn challenged Ted Braun to make a movie that’s positive about the MLM industry and/or positive Herbalife. Given the hindsight of the FTC’s findings, some wonder how Herbalife can even be in business.

Herbalife assumed that Bill Ackman funded the film and cybersquatted on the domain name BettingOnZero.com, to trash it as an “infomercial.” Just this morning (8/15/2016), I was able to see an ad of apparently false information Herbalife was running in Google:


BettingOnZero.Com

I didn’t realize that cybersquatting on domain names was legal nowadays. Even if it wasn’t, that simply validates Fichthorn’s opinion of MLM’s sleazy nature.

Fichthorn came out to show that he had no position in Herbalife’s stock and that he was only interested in the altruistic idea of telling the story to help consumers.

He also explained that Herbalife and its supporters were invited to share their side of the story in the movie, but they declined.

Betting on Zero Reviewed

I’m going to start by giving my wife’s opinion on the movie. Why? She represents what I’d call the average person who knows a little about MLM but hasn’t spent nearly ten years of her life studying it as I have. Also, my other option was to ask my 2 and 3-year-olds… and they would tell you it was an adult movie, not a kid movie.

My wife said it was fantastic! So I’m left to presume that highly-educated people that like documentaries would think the same. And just maybe the average public would too if they weren’t focused on what nonsense Kim Kardashian is up to.

It’s hard for me not to be a little more critical of the film. I appreciate that Ted Braun had to take the journey down the rabbit hole to discover the truth about MLM. I’ve taken that journey with hundreds or thousands of commenters on this website, and it’s getting a little old. I want to show them the destination because people are generally too busy to take the journey.

A large chunk of the movie was about the Wall Street aspect of Herbalife specifically. That’s fair… hey it’s what the movie was supposed to be about. However, it’s easy to get so involved with stock prices that you lose sight of the MLM aspect. I’ve read from many sources that there are around 1200 private MLMs. The Wall Street story is great on its own, but it is an intermezzo compared to the main MLM story.

Maybe for others, the Wall Street hook will be what draws them into learning more about MLM fraud.

I want to praise Ted Braun for showing Herbalife’s defense with videos of the CEO even when Herbalife didn’t appear to want to defend itself. Given the FTC’s evisceration of Herbalife, it feels to me that they had no defense other than bemoan after the fact that it was one-sided.

In any case, readers should refer to my wife’s review rather than my own unfair expectations that suit what I want to see.

My favorite parts in the movie involved me pointing out the people to my wife and how I know them. I don’t know how many other people can watch a movie and point out the times you’ve talked with the “cast.” (I’m not sure the term for people interviewed in a documentary.)

For example, I was able to say to my wife: Robert FitzPatrick is the guy you took a message from while I was walking the dog after I wrote Pyramid Scheme Questions Cause Herbalife to Lose 3 Billion Dollars. I would call back Mr. FitzPatrick a few minutes later and talk with him for around 2 hours.

(Side thought: Few people seem to remember the days (mid-2012) when Wall Street’s David Einhorn asked questions that implied Herbalife might be a pyramid scheme. That was before anyone had any clue that Bill Ackman was interested in shorting Herbalife.)

Lawyer Douglas Brooks had a fairly significant role in the film as well. And he has been very helpful to me. While the LifeVantage/Protandim (LFVN) settlement wasn’t the result I was looking for, he provided support at a critical time of need (and the result wasn’t his fault in any way).

I got to tell my wife that Dr. William Keep was the guy who retweeted my comment on MLMs proliferating illegal health claims just the day before the screening:

@prof_billkeep @TruthinAd "It's next to impossible, like herding cats" – MonaVie's Dallin Larsen: https://t.co/ueoTJNwJV2 Wait, responsible?

— LazyManAndMoney (@LazyManAndMoney) August 10, 2016

After the Movie

After the movie was the best part of the event for me. Filmmaker Ted Braun and Vanity Fair’s William D. Cohan participated in a panel discussion with… Bill Ackman.

I moved up for the main event:

The panel was excellent… I have asked Newport Film if they have footage, but haven’t heard back yet. Braun and Cohen were talking about the film with Cohen playing the role of interviewer. It almost felt like they teasing me having Mr. Ackman just sit there quietly.

The questions went on for a bit, and you could almost feel that this is probably the longest Ackman has gone without a microphone in his hand. At one point, he awkwardly grabbed the microphone to answer one of the questions. I’m not sure he gave it up the rest of the night.

Ackman talked about everything from meeting the Hispanic victims to general MLM behavior. My wife and I clapped particularly loud when he said that these companies sue their critics and try to get them fired from their jobs.

It’s a little more difficult for MLM companies to have me fired since I own my own business. Still, I’ve seen dozens of requests from MLM followers to bombard my old employer and demand that I am fired for how I spend the company time. (It’s laughable since I left that company years before I wrote about MLM.)

One of the other interesting things that Ackman mentioned is that it was only the second time he’s seen the film, with the first being at the Tribeca film festival.

After the Betting On Zero Panel

After the panel, Bill had a few words with the NewportFilm people. I hovered while he finished up with them. Then he turned to me and held out his hand. I thanked him for what he’s doing and explained that I’ve been writing about MLMs for 8 years, have had 3 lawsuits, and probably 7 or 8 cease and desist letters.

I explained that I would love to be in his position to declare an MLM a pyramid scheme like he’s done with Herbalife. Herbalife isn’t dumb enough to sue a billionaire Bill Ackman. No MLM company is dumb enough for that. However, burdening “Lazy Man” with an expensive lawsuit is another story.

The conversation went on for about maybe a minute and a half with me doing most of the talking. Bill explained that this is unfortunately how these companies work. He ended with:

“Don’t worry. We are going to get them. We are going to get them all.”

I realized my website could be the perfect honey pot to trap MLM companies. An MLM company could sue me thinking that they are picking on “Lazy Man” and find themselves having to deal with a bunch of consumer advocates such as Bill Keep, Truth in Advertising, and maybe even Bill Ackman’s or John Fichthorn dollars looking to set a further precedent to protect consumers against MLM scams.

We live in interesting times.

Filed Under: MLM Tagged With: Betting On Zero, Bill Ackman, HerbaLife, John Fichthorn, Ted Braun

My Best Investment Idea Ever: Short Herbalife ($HLF) Stock

August 31, 2016 by Lazy Man 4 Comments

I didn’t plan to write this article today. I had hoped to write about EpiPens as I mentioned a couple of days ago. Unfortunately, once again, life intervened, so I’m pivoting to an article that is easier to write.

I ask that you please bear with me. I’m a little surly after spending yesterday responding to RainSoft’s legal discovery of my Yelp-like review here. It’s like this awesome true video:

… except imagine that everyone involved is from the 1800s and doesn’t know anything about photocopiers. That was my day… in my opinion*.

(By the way, if anyone wants to help me protect consumers please see this link.)

Sorry for the long introduction… let’s get back to the topic…

The best investment idea I’ve had in years, perhaps the in the entirety of this blog, is to short Herbalife ($HLF) stock… or perhaps buy puts on the stock.

Some will consider that a bold statement and it requires a bit of an explanation.

First, what is shorting a stock? I’ll let Wikipedia provide a better explanation than I could. What is buying “buying puts” on a stock? Again, I’ll defer to Wikipedia on the subject.

Essentially those two ideas are about making money by expecting the value of a stock going down.

In ten years of writing Lazy Man and Money, I never seriously considered betting a stock will go down. In full disclosure, I don’t even know if I have an account that allows me to do so (I think it may require a margin account). That should make it obvious, but I don’t have a position in Herbalife or a negative position in any other company. I might (and probably will) explore shorting Herbalife and/or other MLM companies in the future. The scale is likely to be weeks or months in the future, because, well, as I mentioned at the outset of this article, I’m fairly busy.

(I’m going to extremes on disclosures because of lawyers, such as Vorys, Sater, Seymour and Pease :: Attorneys-at-Scam… which is not my title or my article).

The Short Case for Shorting Herbalife

I haven’t done a “deep dive” into Herbalife like some other MLM companies, but I have written: Pyramid Scheme Questions Cause Herbalife to Lose 3 Billion Dollars, This Herbalife Story is Amazing, and Herbalife Settlement: Quick Reactionary Thoughts.

My opinion is that Facts About Herbalife has shown numerous cases of fraud. I believe that the FTC settlement with Herbalife agrees as they write:

“This settlement will require Herbalife to fundamentally restructure its business… Herbalife is going to have to start operating legitimately, making only truthful claims… and it will have to compensate consumers for the losses they have suffered as a result of what we charge are unfair and deceptive practices.”

Some will ask why the FTC would “settle” with Herbalife given that statement that essentially calls them out for fraud. As a long-time FTC insider explains the FTC needs to sue pyramid schemes which take years and millions of tax-payer dollars. Perhaps the LA Times didn’t understand that, because they’ve asked why Herbalife is even allowed to conduct business. Perhaps the LA Times’ writer did understand it but he wanted to emphasize the absurdity of the situation.

I believe that Wall Street has its head in the sand.

This is the second time that the FTC mandated an MLM company to make changes to “operate legitimately.” The last time was Vemma about a year ago. What happened? You should read this Truth In Advertising retrospective on Vemma where the company has lost millions. The CEO has thanked people for continuing to buy its products because, in his words, “you have no idea how badly I needed your help and need, still need your help today.”

My understanding is that Herbalife will be forced to make similar changes that Vemma had to make. I believe that starts in May 2017. I don’t think Wall Street understands what has happened to Vemma… perhaps because Vemma isn’t a publicly traded company.

I think that the FTC settlement will essentially suffocate Herbalife like it did with Vemma. I think the FTC moved towards this settlement because it is a lot of quicker and easier then spending a decade in court debating on what a pyramid scheme is. I think Herbalife agreed to it, because they weren’t in a position to argue for anything better. This way they can at least buy some time.

In my opinion it is EXTREMELY notable that Herbalife didn’t just say, “We’ll put our products in stores and avoid this MLM/pyramid scheme mess.” I can’t imagine a legitimate company with legitimate products at fair pricing points, not embracing that. It seem to be common sense and I think a 5th grader could grasp the concept. However, if I were a company operating a pyramid scheme, I would probably fight tooth and nail to remain that way and avoid putting my products in a competitive free market situation. It seems that Herbalife is embracing that second path.

I don’t see how this is going to end well for Herbalife. I think investors can take advantage of that.

* I’ve decided to include the words “in my opinion” in my articles involving scams or lawsuits in the future. (If I forget to include these specific words readers, agree to acknowledge this disclaimer.) I thought that this was understood, as this entire blog is about my opinion on things. It seems that lawyers like to argue otherwise. While in disclosure mode, I should upgrade my previous mention of “a little surly” to “very surly.” Fair?

Filed Under: Investing Tagged With: HerbaLife, HLF, shorting

Herbalife Settlement: Quick Reactionary Thoughts

July 15, 2016 by Lazy Man 9 Comments

I checked into my stock watchlist this morning to see Herbalife stock up around 20%. That was my first indicator that the FTC/Herbalife settlement must have been announced.

Sure enough… the news headlines were, “Herbalife declared NOT a pyramid scheme.”

I shook my head thinking that this feels like an inside job, just like how The Big Short described the housing bubble that collapsed in 2007-2008.

I saw that the FTC was having a news conference though, so I tuned in… while I watched Twitter.

A funny thing happened… the news got it wrong. It seems that everyone jumped on the first headline rather than wait for the truth.

In this case, it seems it was Herbalife declaring it was deemed not to be a pyramid scheme.

If you watched FTC Chairwoman Edith Ramirez’s press conference, you got a different story.

The video was choppy for me on Facebook live, so I didn’t catch everything. I’m still waiting for the transcripts of the conference (or the conference to be available on-demand). With those limitations in mind please understand that this is my opinion on quickly developing story.

Thankfully, the LA Times is coming out with more accurate information. For example, they quote FTC’s Ramirez from the conference:

“Herbalife is going to have to start operating legitimately, making only truthful claims about how much money its members are likely to make, and it will have to compensate consumers for the losses they have suffered as a result of what we charge are unfair and deceptive practices.”

Does that sound like an innocent company to you?

The LA Times also said, “But Ramirez said at a news conference that it would be inaccurate to say the FTC determined Herbalife’s practices were not a pyramid scheme.”

When Ramirez took questions at the end, big news organization after another barraged her with questions about how Herbalife was not deemed to be a pyramid scheme considering that the FTC seemed to be saying it had all the indicators.

Time and again, Ramirez said that this was a legal settlement and they weren’t going to use that label. She stressed that they got a significant sum for the damaged parties and significant changes to the business model going forward. She also stressed that they were able to accomplish this without spending years in expensive litigation. That’s one of the big reasons why the FTC can’t fight pyramid scheme.

In short, it seems like the FTC won and won big. Here are some of the ways it won in my opinion:

  • Lambasting Herbalife – While they didn’t use the “pyramid scheme” label (more on that later), they did just about everything else to explain why it is a terrible company. It vindicated everything that Bill Ackman said about Herbalife.
  • Money – While $200 million is probably not enough money to compensate all the victims, it is a lot of money. I read one article (which I can no longer find among all the news on the topic) where Herbalife seemed to say that it was worth spending $200 million to put this behind them. This is what I consider to be the biggest case of “bad optics” in history. Herbalife, rather than choosing to sell your product in retail stores, you decided to pay huge, huge money to continue to operate in this dark, dark grey area that got you investigated in the first place.

    It’s my personal opinion and belief that this amounts to tacit admission that the product/pricing aren’t viable in retail by itself.

  • Business Restructuring – There are a lot of restructuring changes that Herbalife needs to make. I’m still pouring through them, but they need to clearly show who is a distributor and who is a customer (one of the big issues with MLM/pyramid schemes) and ensure that 80% of sales to go customers who aren’t distributors (another big issue). These are the kinds of restrictions I wrote about in December of 2015 that could bring MLM scams to an end when Vemma was forced to comply with them. Last I checked Vemma’s business fell on very hard times since they were forced to “operate legitimately” (to use the FTC’s words here).
  • Timing – While the settlement came around 30 years too late, but at least they got a “quicker” resolution with the settlement. This is important to mention, because again the lawsuit would have been long.

In fairness, what did Herbalife win?

  • Pyramid Scheme Label – The FTC seems to have agreed not to apply the term/tag/label of “pyramid scheme” to Herbalife. However, the FTC didn’t declare that Herbalife is NOT a pyramid scheme either. It’s left as undetermined.
  • Only 20% of the Business – It only applies to the United States operations (for now), so it appears that 80% of Herbalife’s business can continue unharmed.
  • Puts the FTC in the Rearview Mirror – Herbalife dodges the threat that the FTC is going to outright shut them down. That’s as big as a win as you can get. I’m now curious if they are going to settle with the SEC and DoJ as well as I’ve read they’ve got their own investigations going.

As a consumer advocate, I’m going to put this “win” column. The biggest reason is that it further shines a light on the problem of MLM/pyramid schemes… and does it in a very, very public way. It looks like we’re moving forward to a place where these companies are going to be more heavily regulated. We need these watchdogs to protect us… remember we are all consumers.

Filed Under: MLM Tagged With: HerbaLife

Senator Markey Delivers Another Blow to HerbaLife

February 18, 2014 by Lazy Man 6 Comments

Regular readers know that I’m intrigued by multi-level marketing (MLM) and that it’s lead me to write a number of articles on the topic. I’ve focused on a few companies that readers have asked me about. However, only reader, another blogger, asked me about the one MLM company that is in the news more than any other over the last year, HerbaLife.

I first got interested in HerbaLife when its stock crashed as hedge fund manager David Einhorn asked a few pointed questions about the sales of the products. To the average person on Wall Street, the questions probably seemed silly. After all, who really cares who buys the products as long as HerbaLife is making money, hitting the earning expectations and growing. That’s really what Wall Street is focused on. However, someone who know about MLMs would realize that if a majority of the products are being sold to distributors who are recruited as part of the business opportunity, it is a pyramid scheme.

Einhorn’s questions hit to the core of that. He found a very clever way of asking, “Are you a pyramid scheme?” HerbaLife’s inability to answer where the sales were going, along with a dismal to the importance of it amounted to them saying, “We don’t know if we are a pyramid scheme, and we don’t find it important to find out.”

It was absolutely shocking on so many levels. However, Einhorn didn’t pursue it any further and let it drop. A few months later another hedge fund bigwig, Bill Ackman, picked up the ball and knocked it out of the park with an amazingly detailed presentation illustrating why HerbaLife is a pyramid scheme. With it, he announced that he’s putting a billion dollars of his own money on the line to short the stock with the proceeds going to charity.

Wall Street did what Wall Street does… a bunch of big investors looked at one person with a large short position and figured out how to take advantage of the situation. They did this without ever addressing whether HerbaLife is a pyramid scheme or not. They closest they came is to say that they don’t expect the FTC to act because they don’t have the resources. It sounded a lot like someone exposing an organized crime ring, and a bunch of people supporting it because it was so well-funded and well-connected that the police wouldn’t touch it.

A few months later, several politicians and pyramid scheme experts got involved and wrote letters to the FTC
Herbalife and Pyramid Schemes are Heating Up. The FTC has done what it always does, makes no public comment.

Finally, about a month ago, Senator Ed Markey (from the most awesome state of Massachusetts) wrote letters to HerbaLife, the FTC, and the SEC asking the questions that need to be answered. He’s asked for responses by February 28th. That date is fast approaching and I haven’t seen any organization put together a response yet.

So I guess the story continues. It is really starting to mirror Fortune Hi-Tech Marketing which got halted by the FTC. USA Today did a story asking if it was a pyramid scheme. The president of the company defended the company saying, “If it were illegal, I wouldn’t be standing here.” It took a couple more years for the FTC to act, but it finally got a court order to shut the company down pending a full investigation.

The more that I look at MLMs, I see it as a blending of two things… a legitimate commissioned sales job, and an illegal pyramid scheme. Even the FTC seems to divide it as such: “Not all multilevel marketing plans are legitimate. If the money you make is based on your sales to the public, it may be a legitimate multilevel marketing plan. If the money you make is based on the number of people you recruit and your sales to them, it’s not. It’s a pyramid scheme. Pyramid schemes are illegal, and the vast majority of participants lose money.”

It seems clear to me that the recruiting of people and making money off sales to them makes a company out to be a pyramid scheme. That’s the core of what makes an MLM and MLM. The message here seems to be that it’s okay to run a little bit of a pyramid scheme if you blend it with a commissioned sales job. If a reputable company wanted to give individuals a business opportunity, why not just make it sole the commissioned sales job so as to ensure it is legal? My guess is that people aren’t interested in commissioned sales job and it is much easier to parade a few examples of people making big money to draw people in.

What’s the takeaway from all this? I’m not sure. One thing that I’m pretty sure of is that if anyone really looked into this they’d see that this is a huge problem with a pretty easy solution. If the watch dogs (the FTC) had the motivation and the funding (a huge problem) to do their job, we’d prevent these companies from taking advantage of the public. My guess is that will happen sometime in the next 15 years. I quite honestly can’t understand why it hasn’t happened yet.

Filed Under: MLM Tagged With: HerbaLife

Herbalife and Pyramid Schemes are Heating Up

October 7, 2018 by Lazy Man 5 Comments

This past week is it was so hot in New England, I felt my eyes getting melty like at the end of Raiders of the Lost Arc. I couldn’t help but think that it must be like how MLMs and Herbalife has been feeling lately. It seems like people are really turning up the heat on them.

A lot of the action seems to be directed to the FTC to do their job in holding these MLMs accountable. In particular these letters focus on Herbalife, which is hot in the news since hedge funds managers put it in the spotlight, including a billion dollar bet from Bill Ackman that it is an illegal business. My favorite letter is from William Keep to the FTC. He’s known for having worked with the FTC in the past, especially when it comes to MLMs, but he’s also the Dean of The College of New Jersey. The letter is actually a fairly general commentary about the industry.

The letter makes a couple of points that are probably not news to readers of this site. In particular he points out, “However, the lack of clear regulatory and enforcement makes distinguishing [an MLM from a pyramid scheme] very difficult. The recent FTC case of Fortune Hi-Tech Marketing (FHTM) – a firm that operated for more than ten years and had two former attorneys general on its advisory board – is one illustration of this point.” In case you missed it, the Fortune Hi-Tech Marketing scam was halted by the FTC for allegedly being a pyramid scheme after it was running for ten years. Many organizations pointed out that it was run like a pyramid scheme. USA Today made such comparisons. By the time the FTC had acted tens of millions of consumers dollars were lost to the scheme.

It’s almost like William Keep read my article: Now We Can’t Trust the FTC to Protect Consumers? Then again, in fairness, it’s the only logical conclusion a person can make of the situation.

Keep isn’t the only one putting the pressure on the FTC. Congresswoman Linda Sanchez of CA has written her own letter to the FTC. NYC councilwoman, Julissa Ferreras, has written her own letter. These two letters are from concerned politicians worried that the company is targeting their Latino community.

This is putting FTC Chairwoman Edith Ramirez in a bit of a tough spot it seems. The problem, as is often the case, comes down to something we are all familiar with: money.

For years I’ve been citing the FTC’s inability to fight Free Credit Report legally due to financial constraints. The FTC had resorted to coming up with catchy jingles like FreeCreditReport’s to explain that there are hidden fees and it wasn’t really “free.” As the author of the article, Bob Sullivan, concludes, “But it says something eerie about the state of consumer protection in America that the federal agency charged with protecting us has resorted to satire. Given the size of advertising budgets at companies like Experian, I can’t imagine the FTC can win a marketing war.”

The New York Post wrote, “The FTC has been reluctant to pursue Herbalife, due in part to the expense of going up against such a huge, well-financed company – especially given the ambiguity of the rules, sources said.”

It’s a really sad state of affairs that America can’t figure out a better way to solve this issue. It doesn’t take me ten minutes to figure out a few solutions. One idea would be to require any MLM company to pay a regulatory fee and that money would be used to investigate and ensure that they aren’t pyramid schemes. If an MLM isn’t a pyramid scheme they should jump at the chance to support this as it would clean up the industry from the bad eggs. If the MLM industry doesn’t like it, then I’d say, “tough poop”, there’s precedent to doing it. Drug companies need to pay FDA fees to regulate the industry. Another solution would be just let the FTC collect the money they get from lawsuits and add it to their budget to fight more. I’ve made it very, very easy for the FTC to nab One24 for being a pyramid scheme, and they aren’t even well-funded. The FTC should be able to go there with Lionel Hutz representing them, shut them down, and recover millions to fight other cases.

The above solutions are obviously very general frameworks, but this isn’t an insurmountable problem. It’s just a problem that people are too lazy or don’t care enough to solve.

While I’m here, I just wanted to check with the rest of the readers, particular those in America. This is still America, right? I’m not sure anymore. Politicians trying to come to the rescue of American consumers? The organization whose sole purpose is to protect American consumers is turning a blind eye to the issue? Sounds like Bizarro America, right?

Filed Under: MLM Tagged With: HerbaLife

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