News & Analysis as of

MLM Industry

FTC Enters Into Landmark Settlement With Network Marketing Company; Vemma Lives To Play Another Day

by Buchalter on

The sixteen month long lawsuit between the Federal Trade Commission and Vemma Nutrition Company has come to a negotiated resolution under terms which will allow Vemma to continue operating its business under restrictions...more

Vemma Settles Ongoing Litigation with FTC over Pyramid Charges

by Kelley Drye & Warren LLP on

The FTC announced today that it had settled charges with multi-level marketer and seller of health and wellness drinks Vemma over allegations that it operated a pyramid scheme. The FTC initially filed the action in August...more

Lack of Due Diligence Re China Sub Yields FCPA Charges for Parent

by Dorsey & Whitney LLP on

Doing business in high risk areas of the world requires additional diligence to avoid corruption issues. The SEC’s latest FCPA settlement is an example of an action where the parent company took proactive steps, but they...more

Supreme Court of Georgia Affirms Trial Court’s Grant of Judgment Notwithstanding the Verdict in Defamation Case

by Akin Gump - Excubitor on

On July 8, 2016, the Supreme Court of Georgia affirmed the judgment of a trial court in a case involving Stanley Cottrell, Jr., who according to the court “engaged in a number of solo running exhibitions with a Christian...more

SEC Describes Recent Efforts to Combat Pyramid Schemes and Affinity Frauds

by McGuireWoods LLP on

Over the past two years, the Securities and Exchange Commission (SEC) has stepped up enforcement actions against pyramid schemes and related affinity frauds. Last week, in a speech at the University of Illinois at Chicago,...more

Court Clarifies Conditions to Certify a Class Action for Damages under Section 36 of the Competition Act

On August 7, 2015, Justice R. LeBlanc of the Federal Court of Canada dismissed a motion to certify a class action in Murphy v. Amway Canada Corporation, clarifying the conditions a proposed class plaintiff must meet in order...more

Are there MLM company programs that help personal and professional growth within the company?

by Babener & Associates on

Absolutely. First, it should be noted that this industry boasts some of the best motivational and teaching trainers in the sales business. Just Google “MLM Training” and you will be led to great trainers and systems, such as...more

New Press Release: MLMLegal.com and Babener & Associates Announces Its 69th National Starting and Running the Successful MLM...

by Babener & Associates on

LAS VEGAS, NV — (Marketwired) — 01/06/15 — For more than 28 years, leading industry experts have educated the executives of starting and existing MLM, direct selling, network marketing, and party plan companies on how to...more

What Is Coding and How Does It Work?

by Babener & Associates on

Most modern direct selling plans offer enroller coding bonuses. Historically, a sponsor enrolled a new distributor frontline and was deemed the sponsor. Commissions flowed from this relationship. However, as sponsors became...more

October 2014 MLM Startup Conference Success!

by Babener & Associates on

You wouldn’t believe the turnout we had for the October 2014 MLM Startup Conference! Entrepreneurs, executives, founders, and CEOs from 98 direct selling companies registered for the event! Over 160 entrepreneurs registered...more

The Origin and Operation of the Famous 70% Rule Explained

by Babener & Associates on

The 70% rule derives from the 1979 FTC Amway decision in which an administrative law judge recognized that Amway’s 70% rule helped prevent inventory loading (it is not a retailing rule). Basically, the Amway rule provided: at...more

What Is the Difference between “Sponsoring” and “Recruiting”?

by Babener & Associates on

Although the terms sponsoring and recruiting are often used interchangeably, they actually have two different meanings. Recruiting is the act of searching and soliciting new distributors for the downline sales organization of...more

What do Startup Companies Think about Long Term Professional Relationships?

by Babener & Associates on

MLMLegal.com and Babener & Associates have been with many network marketing companies from the very beginning, from startup to stable. We were involved in early stages of a number of leading MLM companies, including some...more

How Important Are Celebrity Endorsements? Do They Help Marketing or Is It a Double-Edged Sword?

by Babener & Associates on

In the conventional advertising world, celebrity endorsement is very effective. Among the factors for effectiveness includes the fame of the celebrity, the connection with the product or service, whether or not the celebrity...more

What Should I Look for in a Company When Choosing Back Office Software?

by Babener & Associates on

Virtually all new startup direct selling companies utilized an outsourced technology solution for managing genealogies and commission payouts. In addition, such technology serves distributors by providing back office access...more

How Often Should Companies Renew Their Policies and Procedures to Make Them Relevant in Today’s Marketplace?

by Babener & Associates on

There are two issues that have surfaced in recent years: 1) social networking and 2) frequent migration of distributors between companies. With social networking concerns, companies have had to decide on positive protocol for...more

Challenges and Opportunities Facing Network Marketing Companies

by Babener & Associates on

We have a long-term perspective as a law office that has had three decades of experience in the MLM industry. In the last three years or so, developing trends have posed both opportunities and challenges for network marketing...more

SEC Brings Another Pyramid Scheme Action

by Dorsey & Whitney LLP on

Following the disclosure of the massive Madoff fraud, Ponzi scheme cases became a staple of SEC enforcement. More recently the agency seems to be focusing on another type of investment fraud scheme — pyramid schemes. At the...more

Raise Capital to Start Your Network Marketing Company

by Babener & Associates on

Raising capital to fund your network marketing startup can be tricky. In fact, there is no clear cut answer to finding funding. However, there are options available to MLM company owners. There are many giant direct sales...more

Introducing the New Multi-Level Marketing Governing Act

by K&L Gates LLP on

Taiwan had approximately 369 multi-level marketing (MLM) companies and a total of 3.09 million MLM participants as of December 31, 2012. Adjusting for people who participate in more than one MLM company, almost 12% of...more

Photos of the MLM Startup Conference for Executives of Startup and Existing MLM Companies

by Babener & Associates on

And yet another successful network marketing Conference! In our February 2014 MLM Startup Conference we have covered such topics as recruiting, software, legal, technology, capitalization, compensation plans, lead generation,...more

Fill out the short survey to receive two free tickets (worth $345.00!) to the next MLM Startup Conference in Las Vegas!

by Babener & Associates on

MLMLegal.com Launches the Innovation Campaign for the February 27th & 28th, 2014 MLM Startup Conference! Fill out the short survey here to receive two free tickets (worth $345.00!) to the next MLM Startup Conference in Las...more

How Do I Find Top Distributors?

by Babener & Associates on

This is the million dollar question. The need for capital is in inverse proportion to your ability to recruit. Your network marketing company will either have hired that talent or you will bring on a vice president of...more

How to Develop a Compensation Plan

by Babener & Associates on

Understanding how to write a complete compensation plan is important for your network marketing company. Step-by-step guides found online are often incomplete and don’t provide you with the detailed information that you need....more

Concerns about Merchant Account Processing: Should I Have Only One Merchant Account?

by Babener & Associates on

This is a question for a MLM startup or existing company as opposed to a MLM consultant. For distributors who drive customers to their replicated websites, the company has in place credit card processing capability. For a...more

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