Late last month, the SEC filed an action against Raymond C. Chop and Nicholas F. Chop for insider tradeing related to Serologicals, Inc. Allegedly, the two met with a Serologicals employee on April 23, 2005, and found out that the company was being sold. On the following day, April 24, Raymond purchased 500 shares of Serologicals stock and Nicholas purchased 400 shares.

Prior to the market opening on April 25, it was announced that Serologicals would be acquired by Millipore. The stock purchased by the Chops went up 34%, and Raymond profited $3,785, while Nicholas profited $2,897. Each has agreed to pay disgrorgement in the amount of their profits, plus prejudgment interest, plus a fine equal to their profits. (Essentially the amount they will each pay is double the profits plus a little interest.)

Millions of dollars don’t have to be involved for the sec to take action.

A fluff piece about a Mary Kay Cosmetics distributor in the Springfield News Sun this morning mentions my website, pinktruth.com. The fluff piece focuses on a woman who drives a “Mary Kay car” and reportedly has good pay. Yet at this woman’s level in the distributorship chain, she is probably making less than $20,000 a year.

Here’s the mention of my consumer education site:

The Web site PinkTruth.com, established by Tracy Coenen, a forensic accountant and former sales consultant, offers opinions and experiences from women who have been members of the sales force and opted out.

On the site, Coenen listed her major concerns about what she believes is a multi-level marketing operation. “Incomplete information given during the recruiting process, unsubstantiated earnings claims, and pushing large quantities of inventory on new recruits” round out her list.

Willa Eichelman, a division chief with the Air Force at Wright Patterson Air Force Base and Enon resident, has heard the claims, but feels every woman involved can make her own decision. Working as a sales consultant under Stevens for the past year, Eichelman said she did not feel forced to take on a large inventory she could not afford.

She decided to carry an inventory so she could fill customer orders immediately. “It’s a personal business decision. It was suggested to me when I started, but not required,” she said.

The problem with the “optional” inventory, is that so many women are strongly led to believe they cannot succeed without it. And who goes into business to fail? New consultants are frequently overloaded with too much product, and it sits on the shelves due to the very small market of actual retail customers.

20/20 did a hidden camera investigation for 3 months, going to Mannatech sales pitches around the country. The meetings start with disclaimers that the products don’t cure anything. Yet the meetings are full of testimonials from people who claim they were cured by Mannatech products. Claims are also made that the product is a bigger breakthrough than even penicillin.

Mannatech products are only sold through a multi-level marketing (MLM) plan. The company said it had 1/2 million representatives in the United States in 2006. There are complaints that sales associates are saying that the Mannatech products cure all sorts of illnesses, including autism, cancer, multiple sclerosis, and numerous other ailments. The associates train other associates to carefully avoid saying the products cure these ailments, but that they can bring in people who will give testimonials.

Glycobiology is what Mannatech claims is behind their products, but actual biologists say that there is no connection between glycobiology and any positive effects in the body. The biologists even say that the body is not affected by these sugar pills. Benefits of “glyco-nutrients” are extolled by Mannatech representatives, even after giving certain legal disclaimers that the prodcuts do not “mitigate or treat” anything.

Angie Rhodes, a college student, was diagnosed with brain cancer last summer. Without treatment, doctors said she’d live three years. She was advised to undergo surgery quickly. The tumor was the size of a fist, and after surgery, she was left with two small spots of cancer. They could not be removed because of the risk of paralysis. She was advised to undergo chemotherapy and radiation.

Instead, Angie began taking megadoses of Ambrotose “immune support formula,” a product sold by Mannatech, but not FDA approved. It is a sugar pill. Literally. The sugars come from an aloe vera plant. A one month supply costs $200. Angie heard testimonials from others, and literally bet her life on this sugar pill.

She feels God put Amrotose in front of her, and that she is being cured. She tells others online that they should take this product for their cancer. Angie says that Mannatech does not say that they cure cancer because of legal technicalities. An MRI on Angie, who took Ambrotose for 6 months, showed that there was no change in the size of her tumor. Her oncologist continues to recommend chemotherapy and radiation, but Angie says she will instead continue with Ambrotose.

Milberg Weiss & Bershad LLP is talking with federal prosecutors about a potential settlement regarding the accusations of improper kickbacks in class-action suits. Milberg partner David Bershad is also in talks with prosecutors about a personal guilty plea.

The firm and Bershad were indicted in 2006, along with former partner Steven Schulman. The indictment of the firm lists 20 charges related to the payment of $11.3 million in kickbacks.

An agreement between Milberg and prosecutors might be finalized withn a few weeks. The settlement would likely include the payment of a fine and some future monitoring of the firm and its business practices.

Milwaukee Public Schools is probably in the running for one of the worst school districts in the United States. Yet the taxpayers keep letting the administration spend OUR money on ridiculous things. Early this morning, taxpayers were screwed again with a budget that will increase property taxes 2% for this year, and 4% for last year (because someone added wrong and we didn’t get screwed enough last year).

As far as I’m concerned, until MPS can actually educate children to read, write and add, there should be no extra money and no extras. You get a building, you get teachers, you get desks, and you get books. Nothing else.

Here are just a few ways the Milwaukee School Board has dreamed up to waste several million more dollars of taxpayer money :

• $375,000 to expand driver’s education
• $62,000 to hire students to work in the the two “nature centers” operated by MPS
• $101,475 for a “policy analyst,” a new employee who would spend time doing financial analysis on behalf of the school board

The best part about all this extra spending? MPS is actually looking at a DROP IN STUDENTS. Enrollment is expected to go down 3.5%, or 87,773 students. So on a per capita basis, the spending is going up a lot.