The Securities and Exchange Commission should ratchet up its scrutiny of Herbalife and other multilevel marketing companies to ensure that their distributors aren’t violating anti-pyramid scheme laws, according to one top industry expert.
Bill Keep, the business dean of the College of New Jersey and a trial expert on pyramid schemes, urged SEC chief Mary Jo White to conduct ongoing reviews of the growing MLM industry and recommended that companies submit their enforcement policies to regulators every five years.
“I urge you to take serious the ongoing threat of unregulated behaviors by hundreds of thousands of MLM distributors affecting the lives of millions of Americans annually,” he wrote in the June 16 letter, a copy of which was obtained by The Post.
Keep fired off the letter in the wake of the recent appellate court decision upholding the Federal Trade Commission’s closure of pyramid scheme BurnLounge, saying it “reinforced the key issues of rewards primarily reliance on recruitment and the need for effective, enforced company policies.”
In his letter to White, Keep called out Herbalife, which is being probed by the SEC and other regulators over pyramid scheme allegations, for its “attempts to distance the company from distributor behaviors.”
The maker of protein shakes and other nutrition supplements