Investor and social activist, Bill Ackman asserts Herbalife is not a legitimate company and has created a website with evidence that he says proves his claim that it’s actually a pyramid scheme. Is Herbalife a pyramid scheme?
MLMs are structured as pyramid schemes, with the addition of a product.The damage caused by aproduct-based pyramid scheme/MLM, far exceeds that of a no-product scheme by loss rate and number of victims.
From the data on Herbalife and modern MLMs formed since the unfortunate 1979 FTC v. Amway ruling, it is evident that they are more damaging than no-product schemes by any measure – loss rate, aggregate losses, and/or number of victims.
If you are a victim of Herbalife, Nu Skin, Amway, or any of the hundreds of MLMs currently operating, there are steps you can take to get your money back and/or to help by warning others to avoid such programs. But you must be willing to make yourself heard. Here's how.
It's not Your Fault You are not Alone
The FTC allows Herbalife to do this.You have two important things to get done as an MLM victim. Share your story here to warn others then tell the FTC to protect consumers from product-based pyramid schemes or MLM.
TheFTChas recently cowered to the Direct Selling Association, the lobby for the MLM industry, by exempting MLMs from having to disclose any information that might protect consumers from MLM abuse. The FTC has been “captured” by the DSA/MLM or "pyramid" lobby.
In a May 2012 Herbalife conference call, successful hedge fund manager David Einhorn asked some embarrassing questions about Herbalife, which caused its stock (HLF) to drop about 30% in value. Then on December 20, 2012, William Ackman, another prominent hedge fund manager gave a presentation to demonstrate that Herbalife is a pyramid scheme and disclosed that he had invested $1 billion in shorting the stock, with a target price of zero. The stock price dropped significantly before recovering, after other hedge fund managers invested long on the stock, challenging Ackman. Herbalife’s CEO defended the company, claiming it is not a pyramid scheme, but is a legitimate direct selling business. This contest between hedge fund titans over the alleged Herbalife pyramid scheme is a drama seldom seen on Wall Street. Get the facts at MLM-TheTruth.com.