This week Barry Minkow and iBusiness Reporting did a comparison of the business models of Pre-Paid Legal Services Inc. (NYSE: PPD) and the Take Shape For Life division of Medifast Inc. (NYSE:MED). Pre-Paid Legal is being investigated by the SEC, and Barry wondered how the compensation plans of Pre-Paid and TSFL stacked up. The obvious question is whether Medifast could eventually face the same scrutiny as Pre-Paid Legal.
It seems that the SEC investigation of Pre-Paid Legal has focused on its stock buyback program (this is how executives and insiders get rich) and how the company is marketed. They also asked for data on membership statistics, so this could open the door to evaluating whether the practices of the company are like a Ponzi scheme.Continue reading
In an article today about the Usana Health Sciences (NASDAQ:USNA) buyout offer by Myron Wentz (Gull Holdings), the following inaccurate statement was made:
The Securities and Exchange Commission concluded during the first quarter USANA’s marketing model is not a pyramid scheme, but the stock has a short interest about 34 percent, meaning many investors are betting the stock will fall.
The SEC did not say that Usana is “not a pyramid scheme.” Nothing could be further from the truth, although company management would like you to believe that this is what the SEC said.Continue reading
PrePaid Legal boasts their “legal services plan.” The truth is that very few legal services are ever provided under the plan. If you have a criminal case, contrary to what you’ve been told, the plan is useless. You are told that you have something like 60 to 300 hours of “free” legal services.
The truth is that those hours are for trial only. All the legal maneuvering up until then? You get 2.5 hours. That’s next to nothing. You will need hours of services before the trial that you will pay dearly for.