Since at least 1979, regulators and critics alike have questioned direct retail sales to the ultimate user inside a direct selling aka MLM company. This last month we saw once again this concern raise it’s ugly head when the FTC went after Vemma as a pyramid, stating they didn’t have enough “ultimate users” to be justified a legit network marketing company.
Yesterday Jason Elrod, founder and CEO of Disrupt Worldwide, LLC. made the following announcement on his Facebook wall.
We have been informed that a former Disrupt affiliate had apparently been soliciting people to give him money in exchange for a purported “share equity” investment in
Our investigation proved that the allegations were accurate and the affiliate was immediately terminated.
Disrupt is not selling any ownership interest or stock and has not authorized the resale of any ownership interest by this former affiliate or any others. Disrupt did not receive one red cent of investment money from this individual.
Disrupt takes all regulations seriously, and if our legal and compliance staff feel this action is grounds for regulatory discipline we will file a complaint against the former affiliate with the appropriate authorities, in our home state, the affiliate’s home state as well as with federal regulators.
If you are solicited by anyone purporting to represent Disrupt for investment purposes, immediately report any person who claims to be selling an investment or ownership interest in Disrupt to the the following: firstname.lastname@example.org
It was not a surprise to me, as I had been following the saga all weekend long. Elrod had reached out and shared his side of the issues. I then reached out to Kingston to get his side of things.
Your world is turned upside down by the actions of others?
If we want the regulators to respect the network marketing community then we should start respecting ourselves.
Are you financially and emotionally prepared if your world was turned upside down in the blink of an eye?
Before I get into the receiver’s report, I want to share a link to an article written by Robert FitzPatrick. FitPatrick is one of the most outspoken critics of network marketing/MLM and one of the most quoted anti-pyramid experts by the FTC.
He wrote an article over at Seeking Alpha titled -- ‘Unfair And Deceptive’: The FTC’s Prosecution On Multi-Level Marketing.