Zamansky LLC announces that it has commenced an investigation of Avon Product Inc.’s (AVP) employee personal savings account plan (the “Plan”) for potential violations of the federal Employee Retirement Income Security Act (“ERISA”).
ERISA imposes fiduciary duties to prudently manage and invest plan assets. These duties were allegedly violated by Avon Products’ continued offering of its company stock during a pending federal investigation for violations of the Foreign Corrupt Practices Act (“FCPA”).
Since 2010, Avon’s stock price has fallen from over $40 per share to below $10 per year. Avon’s collapse in stock price relates to the FCPA investigation by the U.S. Department of Justice and Securities and Exchange Commission. The FCPA makes it illegal for U.S.-companies operating in foreign countries to pay bribes or kickbacks.
Separate shareholder lawsuits have alleged that Avon engaged in systemic FCPA violations, and misrepresented its revenues from various foreign countries. One lawsuit also alleges that Avon made numerous misrepresentations about the extent, reach and costs of the investigations against the company.
According to employee stock and investment fraud attorney, Jake Zamansky, Avon Products’ employees who purchased and held company stock (AVP) through the Plan since 2010 have suffered substantial losses to their retirement savings. The FCPA
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Paul Burks – ZeekRewards President Charged For Operating $850 Million Ponzi Scheme
by Ted Nuyten • • 0 Comments
The president and founder of ZeekRewards, Paul Burks, has been indicted on federal charges for operating an Internet Ponzi scheme that took in more than $850 million dollars, announced Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina, USA
The criminal indictment was returned on 24 October 2014 by a federal grand jury sitting in Charlotte, charging Burks, 67, of Lexington, N.C., with wire and mail fraud conspiracy, wire and mail fraud, and tax fraud conspiracy.
Russell F. Nelson, Special Agent in Charge of the United States Secret Service, Charlotte Field Division and Thomas J. Holloman III, Special Agent in Charge of the Internal Revenue Service, Criminal Investigation Division (IRS-CI) join U.S. Attorney Tompkins in making today’s announcement.
According to allegations contained in the indictment, from January 2010 through August 2012, Paul Burks was the owner of Rex Venture Group, LLC (RVG), through which he owned and operated Zeekler, a sham Internet-based penny auction company, and its purported advertising division, ZeekRewards (collectively “Zeek”).
The indictment alleges that Burks and his conspirators induced victims – including over 1,500 victims in the Charlotte area – to invest in their fraudulent scheme, by falsely representing that Zeekler was generating massive retail profits from
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Class Action Complaint Against ACN And XOOM Energy
by Ted Nuyten • • 0 Comments
Oladipupo Adesina files this class action (Case 3:14-cv-00562-GCM) complaint in the USA – North Carolina on behalf of himself and all others similarly situated.
The class action alleges that ACN and XOOM used a fraudulent and deceptive bait-and-switch sales model to get customers to switch to the XOOM Energy Simpleflex flexible energy plan with a low promotional rate offer and energy savings, and then charging customers exorbitant, non-competitive rates after the promotional period.
It also alleges that ACN and XOOM concealed certain material information regarding the upward trend of the customers’ energy rates and that ACN IBO’s and that ACN’s and XOOM’s websites fraudulently state that consumer would save money on their energy bills and that the consumers’ rates were competitive.
It is further alleged that ACN and XOOM make the cancellation process lengthy and difficult, with cancellation taking up to two billing cycles.
The complaint cites numerous online customer complaints about the plan.
According to the class action complaint:
“ACN and XOOM sales pitch is in reality false and misleading in that the rates actually charged to consumers are not competitive and bear little relation to prevailing market conditions. As a consequence of this scheme, consumers across the nation are essentially being scammed out of
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Avon Wins Lawsuit Over China Bribery
by Tina Williams • • 0 Comments
Avon Products Inc on Monday won the dismissal of a securities fraud lawsuit accusing the cosmetics company of concealing its inability to stop workers from bribing officials in China to win business there.
U.S. District Judge Paul Gardephe in Manhattan found no showing that Avon, former Chief Executive Andrea Jung and former Chief Financial Strategy Officer Charles Cramb intended from 2006 to 2011 to deceive shareholders about the company’s knowledge of alleged bribery, such as through corrupt “dinner and karaoke” events, and dependence on bribes to boost sales.
In a 59-page decision, Gardephe also said Avon shareholders did not show the company intended to deceive them about its ability to comply with the federal Foreign Corrupt Practices Act, which prohibits bribing foreign officials.
The lawsuit was brought on behalf of shareholders from July 31, 2006 to Oct. 26, 2011, and had claimed that Avon’s corporate culture was “actively hostile” to effective oversight. Gardephe said the plaintiffs may amend their complaint if they wish.
Gregg Levin, a partner at Motley Rice representing the lead plaintiffs, did not immediately respond to requests for comment.
Jennifer Vargas, an Avon spokeswoman, said the New York-based company does not discuss pending litigation.
Germany’s LBBW Asset Management Investmentgesellschaft mbH and SGSS Deutschland
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Herbalife About To Settle Class-Action Lawsuit
by Tina Williams • • 0 Comments
Herbalife is close to reaching a settlement with five former distributors who claim the controversial nutritional products company is running a pyramid scheme that has victimized thousands.
Lawyers for both sides told California federal judge Beverly O’Connell last month that “the parties have tentatively agreed on the principal terms of a settlement,” according to court papers.
The parties asked for an extension of several pretrial filing dates, saying they needed more time to finalize a deal.
The suit was brought by California resident Dana Bostick in April 2013, less than four months after hedge fund activist Bill Ackman called Herbalife a fraud and placed a $1 billion short bet on the shares.
In June, four new plaintiffs joined the proposed class-action suit against the Los Angeles company.
Both sides declined to comment on the talks or the amount of the potential settlement under discussion.
Herbalife, which is under investigation by the Federal Trade Commission and other regulators, has denied the allegations and earlier said the suit had no merit.
But it now appears willing to accept a class-wide settlement to put a cap on its liability, sources told The Post.
The class would cover about 1.5 million people — those who joined in the US after 2009 to the present, excluding
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Distributors Sue Momentis For Breach Of Contract
by Tina Williams • • 0 Comments
Day in and day out, Internet users sign various forms of agreements for a variety of reasons, from joining a dating site, to participating in an online auction, to uploading media to a storage locker. These agreements, sometimes known as browse-wrap or click-wrap agreements, are necessary to memorialize and expedite the use of a website pursuant to well-defined rules. More often than not, these agreements substitute for more “traditional” contracts, and they are thus construed as such when contested in court.
A fundamental question intrinsic to contracts is whether an enforceable agreement exists at all. A dispute over the enforceability of an online agreement, and the arbitration provision therein, arose recently in state court in Texas. See Momentis U.S. Corp. v. Weisfeld, No. 05-13-01250-CV (Tex. App. July 23, 2014).Momentis involved a dispute between a marketing company and two of its “independent representatives.”
To sell its products, Momentis U.S. Corp. (Momentis) contracted with third-party independent contractors called independent representatives (IRs). Bishop and Weisfeld (collectively, Plaintiffs) signed up to be IRs. In order to be accepted as such, prospective IRs must complete and sign Momentis’ IR agreement (the Agreement), Policies & Procedures, and submit an application fee. Once the prospective IR pays the application fee, Momentis
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Amway Sues Sony
by Tina Williams • • 0 Comments
Amway is back in court over a dispute with record companies tied to a copyright infringement case settled 16 years ago.
The multi-level marketing giant is suing UMG Recordings Inc., Sony Music Entertainment and Warner Music Group Corp., for violating a 1998 settlement, which required them to provide notice of copyright infringement allegations by Amway distributors so the Ada-based company could investigate and stop them, reportsLaw360.
Instead music companies worked together to conceal the information for at least 18 months before ambushing Amway with numerous complaints, according to the suit filed by Amway’s parent company, Alticor Corp., in April in Orlando, Fla.
Earlier this month, a federal judge in Orlando declined to throw out the case but narrowed the copyright-related suit, Alticor Inc. v. UMG Recordings Inc., according to Bloomberg.
“Amway is pleased that the Court upheld our filing of the breach of contract claim and that the case will continue to move forward,” the company said in a statement to MLive. “We remain confident in our case and our efforts, including policies and training programs, to educate employees and distributors about the proper use of copyrighted materials.”
In 1998, Amway agreed to pay $9 million to settle a lawsuit that alleges Amway and some of
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TriVita To Refund $3.5 Million In Product Claims Settlement
by Tina Williams • • 0 Comments
In its ongoing campaign to combat exaggerated health claims, the Federal Trade Commission (FTC) has reached a settlement with cactus juice marketer TriVita. The Arizona-based company agreed to refund consumers $3.5 million, settling FTC allegations that TriVita deceived consumers with unsupported claims about the health benefits of its Nopalea wellness drink.
Advertisements for Nopalea, which sold for up to $39.99 plus shipping and handling, billed the product as “Inflammation Relief without a Prescription.” The company’s frequently aired infomercials claimed the “prickly pear” fruit drink would treat a wide variety of other health conditions as well.
According to the FTC release, one featured TriVita’s Chief Science Officer, Brazos Minshew, linking inflammation to allergies, Alzheimer’s disease, heart disease and diabetes.
In an ad featuring celebrity endorser and former supermodel Cheryl Tiegs, the former Sports Illustrated model claims, “If you’ve suffered from inflammation or chronic pain for years, there’s something that can help,” the FTC release quotes.
The agency also charged TriVita with failing to disclose its connections to the individuals featured in a separate infomercial. The ad featured testimonials by satisfied customers who were in fact paid employees of the company.
“These kinds of unfounded claims are unacceptable, particularly when they impact consumers’ health,” Jessica Rich, Director of the FTC’s Bureau