Pyramid Schemes

News & Analysis as of

Tennessee Recognizes Personal Use in New Legislation

On July 1st, 2014, Tennessee became the latest government/regulatory entity to adopt updated MLM/Pyramid legislation recognizing “personal use” in pyramiding analysis. The Tennessee language is similar to language adopted...more

Ninth Circuit Agrees with FTC that Online Marketing Program Was an Unlawful "Pyramid Scheme"

The legal status of many membership programs promoted via social media and spam has been called into question by a recent decision of the U.S. Court of Appeals for the Ninth Circuit, which affirmed a judgment that one such...more

Nu Skin Fined in China for Improper Direct Sales Activities

The investigation was launched as a direct result of a series of news reports by the People’s Daily, China’s official newspaper released in January 2014, alleging that Nu Skin China had organized “brainwashing” gatherings,...more

SEC Brings Another Pyramid Scheme Action

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

SEC Wins Freeze Order Over “Cloud Computing” Pyramid Scheme

The “cloud” is a current focus for investors. There is cloud computing, cloud storage and new firms with cloud services. And the Commission discovered a “cloud” investment program that promised a 100% return in 100 days and...more

Press Release: Belgian Court Ruling Declares Herbalife Legitimate Operating Business

A Belgian appellate court declared December 3, 2013 that Herbalife is in fact operating in compliance with Belgian law, reports Yahoo! news. This ruling is in response to previous claims by the consumer organization,...more

New Video Segments from MLMLegal.com – Cross-examination of Dr. William Keep by Travelmax Trial Counsel, Jeffrey Babener

New Video Featuring the Cross-examination of Dr. William Keep by Lead Travelmax Trial Counsel, Jeffrey Babener Although Dr. Keep was called by the State of Kentucky as an expert witness to support the State’s case on...more

Gifting Club?… Run the Other Way…

A gifting club usually begins unintentionally between friends, family and neighbors. Unlike the traditional pyramid scheme, gifting clubs are not promoted as an investment by fraudulent financial advisers. Gifting clubs are...more

Eight Ways to Identify an Illegal Pyramid Scheme

The last thing you want to do is join an illegal pyramid scheme. Here are eight red flags to look for when considering joining a direct selling, MLM, network marketing opportunity: 1. Promotions where the business...more

What is “Front Loading” or “Inventory-Loading?”

Front loading is when a MLM company requires a consultant to purchase an unreasonable amount of inventory that cannot realistically be resold and/or used within a reasonable amount of time. Apart from general pyramiding...more

An Inside Look into a MLM Trial - Travelmax Trial Mini-Series Videos

Have you ever wondered what happens in an MLM trial? In this presentation, MLMLegal.com gives you a rare, front row seat into the complexities of an MLM trial. In more than six hours of video, partitioned in more than...more

MLMLegal.com has released a seminal article by noted direct selling industry expert and legal authority, Jeffrey Babener

Herbalife: What Short Sellers Missed on the Way to the Press Conference… The Personal Use Issue in Pyramid Analysis; Who is an Ultimate User? An excerpt from the article and link to the full article at www.mlmlegal.com. ...more

A View of the MLM Industry: Past, Present and Future – Interview with Jeff Babener

This article is the companion article to the video: A View of the Direct Selling Industry: Past, Present and Future, in which MLM Attorney, Jeffrey Babener, discusses the past, present and future of the direct selling...more

How to Tell if a Direct Selling Company is a Pyramid or a Legitimate MLM

Distributors in a network marketing program that are merely buying product to buy into the “deal” as opposed to having the intention of really making a market for the product, are really working a pyramid scheme, not a...more

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