Tag Archive for MLM Lawsuits

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Kevin Thompson – Lessons Learned From The FTC vs Vemma Law Suit

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Kevin Thompson, the MLM attrorney, is part of the Vemma’s Legal team, in this write up he shares his knowlege. Stuff to read for corporate executives as for Network Marketing professionals in the USA and those entering the USA market.
This was very interesting to read:

In fact, our guess is that most companies will stand pat and continue to take one of two ignorant approaches. The first is the “that won’t happen to us” approach. The proverbial logic behind this approach goes something like this: the FTC doesn’t pursue many companies; with each passing day, more and more companies invade the industry’s space; therefore, our company won’t be THE COMPANY that serves as the government’s sacrificial lamb.

Kevin Thompson:
“This is Part Two of our series on the Vemma ruling. In Part One of

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Direct Selling Defense Fund Announced

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The Direct Selling Defense Fund is trust account by Coppersmith Brockelman and will be used for the legal defense of Vemma vs the FTC.
Cost for legal defense is estimated around $2 million….
Most large law firms in the United States bill between $200 and $1,000 per hour for their lawyers’ time.
The danger for other Network marketing companies is the nature of the attack on Vemma. Vemma have been hit hard on “auto-ship” and “auto-ship commission qualification” a policy that has products automatically shipped to a distributor unless he or she opts out in advance.
Secondly the FTC attacks the binary compensation plan in a recent hearing, there fore the Direct Selling Industry is under attack.
Bob Proctor recently released this video:

 
If you want to support the industry defense this are the wire

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Recall: The FDA did NOT Send Recently A Warning Letter To DoTerra And Young Living

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Yesterday one of our editors posted the news both DoTerra as Young Living Essential Oils had received a FDA warning letter.
Both companies have indeed received such a letter however one year ago, in september 2014. Our editor did not check the source. We apologize for this outdated information.
Both companies have worked well with their compliance teams, and have received no further warnings from the FDA.
The Food and Drug Administration (FDA or USFDA) is a federal agency of the United States Department of Health and Human Services, one of the United States federal executive departments. The FDA is responsible for protecting and promoting public health.
The Warning Letter is the FDA’s principal means of notifying regulated industry of violations and achieving prompt voluntary correction.
The United States Food and Drug Administration (FDA) defines

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DSA President Responds To Seeking Alpha Post

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American Direct Selling Association (DSA) President Joseph Mariano responds to a post by Bill Keep on stock market insights and analysis site Seeking Alpha. 
As a platform for investment research, the opinions presented via Seeking Alpha inform countless decisions, large and small, taken by corporations, government and the public.  It is therefore important that contributors act in good faith to get the facts right.
I am concerned that Bill Keep, one of your frequent contributors, has chosen to co-opt Seeking Alpha into a mouthpiece for attacks against direct selling, one of the oldest ways that Americans choose to work independently, typically on a part-time basis.  By showing blatant disregard for the facts about DSA and direct selling with little to no accountability for his mis-statements, Keep diminishes Seeking Alpha’s credibility and jeopardizes the ability

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DSA President Joe Mariano Explains Pyramid Schemes

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In a letter to the New York Times, in response to a column by Joe Nocera titled The Pyramid Scheme Problem, US Direct Selling Association president Joseph Mariano has written this explanation:
To understand what constitutes a pyramid scheme, Joe Nocera (column, Sept. 15) points to a recent United States Court of Appeals decision that correctly concludes that a scheme exists when recruitment of sales people is at the heart of a company’s business. But the column doesn’t mention that there are additional standards offering useful guidance.
In 2004, the Council of State Governments suggested that every state adopt its model legislation that defines and prosecutes against schemes. The model, or similar legislation, was enacted by 18 states and is notable for its specificity.
We have helped prosecute pyramid schemes over many years and work

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Doug Wead: “FTC Declares War On Direct Sales Businesses”

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Doug Wead is a presidential historian who served as a senior adviser to the Ron Paul presidential campaign. He is a New York Times best-selling author, philanthropist, and adviser to two presidents, including President George H.W. Bush, with whom he co-authored the book “Man of Integrity.”
On 11 september he published the next article:
“The Arizona direct sales company Vemma was recently hit by the FTC and virtually shut down without a judge, jury, or trial. The income of thousands, including single mothers, housewives, young businessmen, retirees, and disabled veterans has been instantly blocked by the government agency.
Nobody will be paid, no matter what they have sold or what work of a lifetime they have done.
Ominously, among the reasons the FTC gave for its action, are methods that are employed by almost all other

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FTC Answer On Pyramid Definition: “I Have Nothing For You”

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New York Times reporter Joe Nocera published the next story under the title “The Pyramid Scheme Problem”:
“I have nothing for you,” said Frank Dorman, a spokesman for the Federal Trade Commission. “Lots of reporters have asked that question. Our final response is, We’re not going to answer it.”
What had I asked that was so sensitive that the F.T.C. wouldn’t respond? I had requested that the agency explain what distinguished an illegal “pyramid scheme” from a legal multilevel marketing company.
What had prompted my question were two recent events. In late August, the F.T.C. had gotten an injunction issued against a multilevel marketing company called Vemma Nutrition, claiming it was in fact a pyramid scheme.
And last week, Fortune magazine published a lengthy story by Roger Parloff about William Ackman’s nearly three-year battle to force

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Vemma Top Earners Might Face Clawbacks

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According to an article in the New York Post, Vemma top distributors might face threads of claw backs if the FTC wins the case.
The New York Post:
“A former top distributor for Vemma may have to fork over millions of dollars in earnings after regulators accused the energy drink maker of running a pyramid scheme that preyed on college students, legal experts told The Post.
Anthony Powell, a top distributor who left Vemma two months ago, was singled out in a report filed last week detailing the alleged scheme. He was a major player in the multilevel marketing company, which the Federal Trade Commission temporarily halted late last month pending the outcome of a Sept. 15 court hearing.
The report, from the temporary receiver appointed to oversee the company, found that 42 percent of the

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Blyth Being Investigated For Breach Of Fiduciary Responsibilities

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Faruqi & Faruqi, LLP, a leading national securities firm headquartered in New York City, is investigating the Board of Directors of Blyth, Inc. (“Blyth” or the “Company”) (BTH) for potential breaches of fiduciary duties in connection with the sale of the Company to The Carlyle Group LP for approximately $98 million in a cash transaction. 
The Company’s stockholders will only receive $6.00 for each share of Company common stock they own. However, the offer represents an inadequate premium since it is lower than both the 52-week high of $10.27 per share and considerably lower than at least one Wall Street analyst price target of $40.00 per share 
The investigation focuses on whether Blyth’s Board of Directors breached their fiduciary duties to the Company’s stockholders by failing to conduct a fair sales process and whether

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FTC – Receiver Email To The Vemma Database – An Abuse Of Government Power?

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Whatever happened in the USA with “innocent till proven guilty?”
When the Vemma receiver (the court appointed lawyer) sends out a copy of the FTC lawsuit to hundred thousands of active customers and affiliates around the world, 12 years of the company networking efforts gets blown up with ONE push of the send button. All this before Vemma gets to stand in front of a judge.
Below email was send out in the name of Vemma Corporate, which confused many people, thinking BK Boreyko and the corporate team has done so.
Unbelievable an USA government agency can come into your office, and send a massive email out on your behalf, around the world, without telling customers, not Vemma is doing so, but the FTC – receiver. I call this abuse of government power. I am

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