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ARTICLE · 07 OCTOBER 2019

Business Opportunity Or Pyramid Scheme?

Frankfurt Kurnit Klein & Selz PC
Frankfurt Kurnit Klein & Selz PC
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Frankfurt Kurnit Klein & Selz PC

Frankfurt Kurnit Klein & Selz PC

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Following from the guidance to multi-level marketers issued by the FTC last year, the FTC has just announced a $150 million settlement with multi-level marketer AdvoCare International, L.P. and its former chief executive officer.

United StatesMedia, Telecoms, IT, Entertainment

Following from the guidance to multi-level marketers issued by the FTC last year, the FTC has just announced a $150 million settlement with multi-level marketer AdvoCare International, L.P. and its former chief executive officer.  In addition to paying $150 million to settle the FTC's charges, the defendants are permanently banned from multi-level marketing.

The FTC had charged these defendants, along with other promoters, with operating an illegal pyramid scheme that promised "average people" that they could  "earn unlimited income, attain financial freedom, and eliminate the constraint of traditional employment" by participating in the AdvoCare program as distributors of the company's health and wellness products, including an energy drink called Spark. However, the FTC alleged, in contrast with these promises, the overwhelming majority of participants never earned any compensation from the company.

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www.fkks.com

This post first appeared in Frankfurt Kurnit's Focus on the Data blog (www.focusonthedata.com). It provides general coverage of its subject area. We provide it with the understanding that Frankfurt Kurnit Klein & Selz is not engaged herein in rendering legal advice, and shall not be liable for any damages resulting from any error, inaccuracy, or omission. Our attorneys practice law only in jurisdictions in which they are properly authorized to do so. We do not seek to represent clients in other jurisdictions.

Originally published by the New York Legal Ethics Reporter

www.fkks.com

This alert provides general coverage of its subject area. We provide it with the understanding that Frankfurt Kurnit Klein & Selz is not engaged herein in rendering legal advice, and shall not be liable for any damages resulting from any error, inaccuracy, or omission. Our attorneys practice law only in jurisdictions in which they are properly authorized to do so. We do not seek to represent clients in other jurisdictions.

www.fkks.com

This alert provides general coverage of its subject area. We provide it with the understanding that Frankfurt Kurnit Klein & Selz is not engaged herein in rendering legal advice, and shall not be liable for any damages resulting from any error, inaccuracy, or omission. Our attorneys practice law only in jurisdictions in which they are properly authorized to do so. We do not seek to represent clients in other jurisdictions.

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