Herbalife @ BehindMLM

Following an investigation into Herbalife’s Chinese operations, the SEC has determined the company uses it’s global compensation plan across the country. As Herbalife reveals in its own SEC filings, ‘[i]n China, while direct selling is permitted, multi-level marketing is not.‘

Consumption of Herbalife products to acute liver failure, according to a case study report published by medical staff in India. The report also details heavy metal, toxic compounds, psychotropic substance and bacterial contamination.

Following on from yesterday’s coverage of the class-action Herbalife “Circle of Success” lawsuit, a ruling has been made on filed arbitration and change of venue motions.

A group of Herbalife distributors have filed a class-action complaint. What makes this case interesting is it targets the company’s “Cycle of Success” events, which the class plaintiffs allege has resulted in over a billion dollars in Distributor losses.

Enforcement of Herbalife’s settlement with the FTC is certainly one of the more bizarre episodes of MLM regulation I’ve seen. As part of the settlement, Herbalife agreed to “restructure” their business. And a big part of the restructuring was only paying commissions on actual retail sales going forward. Considering retail sales volume was negligible to the [Continue reading…]

In addition to the $200 million dollar fine Herbalife copped for running a pyramid scheme last year, the company was given ten months to introduce a new compensation plan. Among other things, Herbalife’s new plan must accurately track genuine retail sales activity and cease paying affiliates solely on recruitment of new affiliates who purchase Herbalife [Continue reading…]

As part of the “we’re not a pyramid scheme, *winkwinknudgenudge*” settlement Herbalife reached with the FTC last year, $200 million will be returned to 350,000 Herbalife victims.

As part of the settlement agreement between the FTC and Herbalife, an Independent Compliance Auditor (ICA) will be appointed to oversee Herbalife’s adherent to the agreement. As per a press-release issued on August 9th, the FTC are now seeking applications for the position.

Accompanying the FTC’s settlement announcement with Herbalife today was a press-conference held by Chairwoman Edith Ramirez. Ramirez opened the press-conference by reading from a prepared statement for about seven minutes. Despite clearly describing Herbalife’s business model as that of a pyramid scheme, the actual words “pyramid scheme” were noticeably absent from Ramirez’s statement. After Ramirez’s [Continue reading…]

Since the FTC’s announcement earlier today confirming Herbalife was operating as a pyramid scheme, I’ve seen a lot of mis-reporting and distortion of the facts. I suspect much of this arises from most people not having the time to read through the FTC’s 42 page long complaint against Herbalife. Either that or the complaint was [Continue reading…]