Date/TimeDate(s) - 04/17/2019
7:30 am - 9:30 am
LocationNassau Club of Princeton
April Business Before Business Breakfast
Speaker: William W. Keep, PhD
Interim Provost, VP for Academic Affairs
The College of New Jersey
Topic: The Endless Recruitment Chain: Multilevel Marketing (MLM), Fraud, & Pyramid Schemes
Join William Keep to learn about the pernicious aspect of Ponzi-type pyramid schemes and the troubled MLM industry.
From 2012 to 2018 hedge fund investor Bill Ackman took a $1B short position against the MLM company Herbalife, losing $100Ms in the process. His bet was that the FTC would charge Herbalife with operating a pyramid scheme. That did not happen, though then FTC Chairwoman Edith Ramirez noted “But they [Herbalife] were not determined not to have been a pyramid.” This case highlights the multi-decade problem of pyramid schemes within the MLM industry. Over the past seventy years door-to-door direct selling morphed into the multilevel marketing industry. Leading companies include Amway, Herbalife, NuSkin, LuLaRoe, Mary Kay, Primerica, Advocare, and others. However, a combination of endless chain recruitment and a lack of “consumer demand,” resulted in the successful prosecution of a number of MLM companies. Of twenty-six pyramid scheme case brought by the FTC the Commission won each, three at trial and twenty-three with settlements that resulted in closing the company. Successfully prosecuted pyramids schemes reward sold products ranging from apparel and nutrition to music and travel. One recent case involved cyber-currency.