Pyramid scheme expert witness Dr. William W. Keep was in the news this week urging SEC chief Mary Jo White to intensify the investigation of Herbalife. The FTC recently closed pyramid scheme BurnLounge, the New York City online music store and Dr. Keep, business dean of the College of New Jersey, recommended that multilevel marketing companies submit their enforcement policies to regulators every five years. Herbalife is a global nutrition company founded in 1980. The company has over 7,400 employees worldwide, and its shares are traded on the New York Stock Exchange with net sales of $4.8 billion in 2013.
Herbalife.com commented on the recent ruling by the Ninth Circuit Court of Appeals in its decision in FTC v. BurnLounge, Inc. Herbalife issued the following statement:
Today’s decision by the United States Court of Appeals for the Ninth Circuit in the FTC v. BurnLounge, Inc. validates product consumption by participants as a legitimate measure of demand for multi-level marketing companies and rejects Bill Ackman’s fundamental thesis against Herbalife. This ruling from one of the country’s most influential courts is consistent with Herbalife’s position that the widespread demand Herbalife has demonstrated for its products, by members and non-members alike, confirms that it is a multi-level marketing company with proper business practices.