If Herbalife Was a Pyramid Scheme, It Would Have Collapsed By Now

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One of the most common arguments used against those who deem multi-level marketing companies pyramid schemes, is that pyramid schemes collapse. Because Herbalife hasn’t collapsed, it must not be a pyramid scheme. Because the company has avoided total collapse for more than 30 years, it can’t possibly be a pyramid scheme. That is false, and…

Herbalife Does Not Track Retail Sales

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This little gem is courtesy of Shortzilla, a Seeking Alpha contributor. In a 1986 Final Judgment and Permanent Injunction against Herbalife in California, the company agreed to the following: B.  defendants shall be in compliance with this Section 5, as long as a verification or documentation system they implement allows them, at any given point…

Bill Ackman on His Herbalife Short

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Herbalife (NYSE: HLF) has been hit by a short seller again. Earlier this year it was David Einhorn simply asking questions about the business. This time it is Bill Ackman calling Herbalife a pyramid scheme and laying out his case. Pyramid scheme allegations are nothing new. Each time, Herbalife vehemently denies it is a pyramid…

Herbalife: Important or Not Important?

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Questions posed to Herbalife earlier this year by David Einhorn sent the stock price down quickly. Einhorn simply wanted to know about customers… actual consumers of the Herbalife products. One has to assume Einhorn has done lots of research on multi-level marketing. And he knows the real deal. Herbalife’s customers are the distributors. Corporate doesn’t…

Similarities Between Herbalife and Pyramid Scheme BurnLounge

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In March, the Federal Trade Commission entered an order against multi-level marketing company BurnLounge, prohibiting the company and its founders from making certain misrepresentation and requiring them to disclose certain things in the future. Over the last few months, the heat has been on Herbalife, after short seller David Einhorn asked some important questions on…

Fortune on Herbalife and David Einhorn

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Two weeks ago the big news was Herbalife’s earnings call, and questions asked by David Einhorn. Stephen Gandel, senior editor at Fortune Magazine wrote a great article on the Herbalife questions and their significance. I was quoted relative to the issues of distributors and recruiting: It’s not clear Einhorn has already placed his bets against…

A New Look at Herbalife

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Yesterday the stock of Herbalife (NYSE:HLF) dropped 20 percent when David Einhorn of Greenlight Capital began asking questions during the company’s earnings call. Herbalife is a multi-level marketing company which sells vitamins. The company describes itself: We pursue our mission of “changing people’s lives” by providing a financially rewarding business opportunity to distributors and quality…

Former Herbalife Director of Venezuela and Columbia Comes Forward With Fraud Claims, Reports Fraud Discovery Institute

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Herbalife (NYSE: HLF) whistleblower says illegal acts likely responsible for region’s dramatic supervisor growth Herbalife (NYSE:HLF) executives identified Venezuela as a Top 10 market for the company in their May 2, 2008, conference call, and indeed, triple digit new supervisor growth was reported there in the first quarter. However, according to former Herbalife Director of…

Lying in Business is Not Compartmentalized (Herbalife, NYSE:HLF)

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White collar criminal Barry Minkow has been investigating multi-level marketing schemes such as Usana Health Sciences, Herbalife Ltd., and PrePaid Legal. One of the most recent revelations by Minkow and his Fraud Discovery Institute was that the president of Herbalife, Gregory Probert, did not have the MBA he and the company claimed in SEC filings.…