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MLM Attorney
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ViSalus investigators criminally indicted. Investigators were hired by ViSalus in 2013 to obtain information about Ocean Avenue. These investigators hacked into some email and skype accounts. They're now facing jail time. 

Did ViSalus encourage or have knowledge of this activity? I have more questions than answers. Read my article to get some details.

Culture Matters.

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Merry Christmas, Talk Fusion. 

TF was sued by its top distributor, Minh Ho. I'll break this down later. But at first blush, the allegations against Talk Fusion are incredibly severe. Minh alleges a number of abuses, including TF using its policies to threaten and intimidate distributors to force them to do things they never would do, pay plan manipulation, fraud, wrongful termination, etc. 

Scott Wellman of +Wellman & Warren LLP represents Minh. Wellman is a good competitor of mine and he knows what he's doing in the space.  It's a well-structured lawsuit.  

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David Klafter, Senior Counsel for Pershing Square, wrote an extensive letter to Herbalife’s new chief of compliance, Pamela Jones Harbour.

The letter contained a few poison pills, designed to harm the company. The letter also contained some practical advice. I break it down here. 

What do you think? Could any of these ideas fly?

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Herbalife announced its settlement of a very serious class action lawsuit. They agreed to pay $15,000,000 in cash towards a fund for restitution AND they agreed to enact several reforms to their policies. The details are broken down here. Be mindful of the corporate reforms, because that's where the industry is going in general over the next few years.

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It's time to have a discussion about the DSA's Code of Ethics. Avon left the DSA because the Code "requires updating."

In this post, I publish some suggestions to get the conversation started. I'm calling the proposed changes the "KT Optimus-Prime Plan" (because everything is cooler when you use Transformer names).

Read the concepts. Share your thoughts. Are some of these doable? Are some too controversial?

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Lori Bush, CEO at Rodan and Fields, gets it! Great article by a very intelligent executive. Some highlights below:

"It didn’t take us long to learn that walking the talk requires constant commitment to education and compliance because, when it comes to salesforce behavior and performance, the simple fact that something works doesn’t necessarily make it right."

"No matter how carefully we craft our compensation program and articulate our Policies and Procedures, if we promote or turn a blind eye to practices that undermine our brand value proposition, a handful of rogue players can wreak havoc and lead to significant net detractors for our products..." 

We need more executives like Lori to accept responsibility for the behaviors in the field. Good for them.

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The attacks on Herbalife have been staged on many fronts. The latest: shaming regulators into intervening. Friend and hedge fund manager, Robert Chapman, allowed me to publish his memo to Herbalife investors about this latest strategy. 

It's insightful and I hope you find it informative.

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Herbalife releases economic analysis from former FTC advisor. The results are solid. Basically, Herbalife products are legitimate, as proven by the fact that the vast majority of participants purchase for resale or consumption. There's a lot of data in the press release.

Here's the catch: Bill Ackman is distancing himself from the pyramid argument. I think he knows he's already lost there. He's starting to focus on the representations being made by Herbalife distributors in the field i.e. false and misleading statements. We'll see how this pans out.

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It was such a bad idea for World Ventures to send a blogger a threatening letter. Owners need to understand that Cease and Desist letters do more harm than good.  The First Amendment protections are broad.  The author is just a young kid giving her perspective.  

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In the video, I discuss the logic the court used in finding BurnLounge to be a pyramid scheme.  If you're not interested in reading about the case, this video is for you.  The court focused on several factors in reaching its conclusion that BurnLounge was a pyramid:

Purchasing patterns
Lack of consumer demand for the products
Requirements to buy products to qualify for commissions
Lack of consumer safeguards (refund policy)
Emphasis of the marketing (product vs. opportunity)

If you're with a company that exhibits similar behaviors condemned in BurnLounge, be careful.  Stay informed.
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