But if the FTC had been convinced by that argument, it seems likely that the probe would have been closed by now.
In the event of a bad outcome in the Herbalife case, the industry’s lobbying arm, the Direct Selling Association, has been drafting legislation that would count internal consumption in the calculation, making virtually every MLM that sells a product (which is most of them) beyond the reach of the pyramid law.
Andrew Jenks was with year-old fashion designer and comic-book co-author, two-time cancer survivor Kaylin Andres as she moved to New.
MTV star and filmmaker Andrew Jenks spends a lot of his time on the road, When it comes to fashion, Andrew enlisted the help of Kaylin.
In many MLMs, high-pressured salespeople convince participants to join in, dangling riches before their eyes as they’re led to make big, upfront purchases of pricey products, then try to recruit others under them to do the same in the hopes of earning big commissions.
The FTC and decades of case law say that people who have signed up as salespeople may well consume products, but that so-called internal consumption doesn’t count when it comes to the recruitment-compensation calculation.
Herbalife and the FTC have been in talks since earlier this year, and last Thursday the company said that those discussions are in an advanced stage, causing its stock to rally.
But buried inside the company’s quarterly financials are indications that it’s way too soon for Herbalife investors to cheer.
Even Charles Munger, the vice chairman of Warren Buffett’s Berkshire Hathaway, which owns the MLM Pampered Chef, said this week on Fox Business News that Ackman is “totally right” about Herbalife.
“It’s a disgusting company that lures poor people into buying product with too much hope it’ll pay off,” he said.