The Federal Anti-Pyramid Law (Summary and Analysis)

The MLM Attorney Provides A Legal Analysis On Federal Anti-Pyramid Law

MLM Attorney Kevin Thompson

Congressman Marsha Blackburn, House Representative of the 7th District of Tennessee, has proposed the Anti-Pyramid Bill Federal that aims to clarify the differences between pyramid schemes and legitimate network marketing companies. If you’re connected to the network marketing industry, whether as a distributor, executive, vendor or owner, the importance of this bill (or a modified version of this bill) is vitally important.

The Need for Clarity

As many of my readers know, I have aggressively advocated for almost a decade for the need to create cleaner guidelines in the industry. The “ocean of gray” that has separated legitimate direct selling from pyramid schemes has predictably led to some very serious challenges. As I accurately predicted in my first e-book titled “Saving the industry by defining the gray,” the fuzzy lines that distinguish legitimate and illegitimate network marketing has greatly contributed to today’s problems. In an environment with ample wiggle room, pyramid schemes can operate under the guise of legitimate network marketing. Zeek Rewards, notable ponzi scheme, did this better than all others. The veneer of legitimacy offered by legitimate network marketing allowed Zeek to amass tremendous influence and inflict significant harm. This, in turn, affects the entire profession.


Q&A with Ben Woodward

World Of Direct Selling Sits Down With Former President of Nikken


From time to time we see career transitions between the corporate world and the field within the direct selling industry. Most often, the direction is from the field to corporate life. It is not common for a direct sales company manager to leave his/her job and start working as a distributor. This is especially true if that person is holding a position like Ben Woodward’s. Ben Woodward has recently left his job as the President of Nikken and moved to the other side.

Let’s hear what Ben has to say on his experiences.

Your last corporate role was with Nikken. Could we start with your educational background and work experiences before joining Nikken?


Three Resources To Help Increase Your Bottom Line

Richard Brooke Launches Direct Selling Company Legal Defense Fund

Home Business News

We have uncovered three great resources to help any entrepreneur, especially a network marketing independent professional! So much is spoken or written on how much you can make in direct sales, and very little mentioned about increasing your net worth! These resources will help you increase your net worth.

Also, the DS Edge Conference is right around the corner. It’s February 4th & 5th, 2016 in Newport Beach, California.

2012_rb_02And last but not least, Richard Brooke, founder of Life Matters, and long-time ethics committee member of the DSA (Direct Selling Association) has launched a direct selling legal defense fund. The first recipient is Vemma Nutritional Company.

Here are a few points of interest Richard shared on the site, which I think are worth pondering.

VemmaHere are some mistakes that Vemma made which the FTC convinced a judge were worthy of an ex parte action
no due process, no notice, just seize and shut down the company.

Vemma had zero distributor enrollment fees, so most “customers” were also “affiliates” depending on the box they checked. The FTC and judge ruled them, as a result, NOT CUSTOMERS.
Vemma traded ethics and public reputation for immediate sales growth in a segment of the sales force edifying obnoxious behavior.
Vemma allowed distributor videos suggesting significant success by recruiting without appropriate disclaimers.

“And here are the results of the government’s actions.”

* Vemma was entirely shut down worldwide for almost a month while the receiver went about dismantling the company. The receiver repatriated international company bank accounts.

* By the time BK resumed partial control of the company, Wells Fargo had withdrawn his merchant account, placed his name and company name on a watch list (black list), making it impossible to obtain a domestic merchant account, and his sales leaders had cut deals to move to competitive companies.

* The court required Vemma to change its compensation plan to one whereby a sales leader could not be paid on their team sales unless Vemma could prove that 51% of that team’s sales came from customers with the title customer. Affiliate personal purchases cannot qualify them for bonuses, only personally sponsored customer and distributor purchases. That compensation plan is still not effectively programmed and functional as of me writing this almost four months after this event.

* Legal fees have already reached $1.4 million and are expected to reach $3+ million before the case is final.

* Vemma has to get court approval for any compensation, incentive, and/or marketing campaigns it wants to initiate.

You can learn more by visiting Vemma Defense Fund

Amended DSA Code of Ethics: Are the modifications meaningful?

Direct Selling Association Modifies They Current Code Of Ethics - Is It Enough?


Beyond just ringing in a new year, January 1, 2016, also signified the enactment of the Direct Selling Association’s (“DSA”) latest Code of Ethics. Before breaking down the differences that exist between the new and previous versions, my commentary on the subject remains the same: the DSA has a long way to go before providing a Code that offers serious protection for member companies from regulatory issues.

The Code’s prior shortcoming was epitomized by the FTC’s action this past year against Vemma, a longstanding member of the DSA that was touted for exemplifying ethical and appropriate business practices. Vemma went from being a recipient of the DSA’s Ethos Award in 2013 to getting targeted and sued by the FTC.

I’ve said it before and I’ll say it again — to really “tighten the screws,” the DSA needs to take the kind of proactive steps that’s bound to upset some people. This would mean implementing stricter requirements that will cause companies to really stretch, improve and adapt.


What Does The DSA Have To Say About The FTC Claiming VEMMA Is A Pyramid?

Direct Selling Association Preliminary Analysis - Federal Trade Commission Action against Vemma Nutrition Company


John W. Webb, Associate Legal Counsel & Senior Director, Government Relations of the Direct Selling Association wrote the following preliminary analysis on the FTC .vs Vemma pyramid allegations. 

MLM News: DSA Defines Direct Selling, Vemma HIt $100 Million In Six Months, Blythe The Most Hated Stock, Youngevity Owns Top Selling USA Coffee Brands


The news in and around the Direct Sales aka Network Marketing World is roaring right now from Wall Street to Main Street. So what is it, that has everyone talking? I think it is the fact, that from regulators to critics, people are starting to recognize legit network marketing companies from illegal ponzi and pyramid money schemes.  This new awareness is opening the doors for investors all the way down to brand new independent professionals getting involved in direct sales in one form or another.

BK Boreyko, Co-founder and CEO of VEMMA, home of the Young Peoples Revolution shot me over the numbers for the first half of 2013…

Starting in January – $14 million, February – $15 million, March – $18 million, April – $19.1 Million, May – $19.3 million, and June – $18.1 million. That’s a total over 103 million dollars! And I might also add that in June VEMMA acquired over 24K new customers and Brand Partners!



Youngevity International (YGYI) Coffee Division Announces Agreement with Marketing Management Inc.

San Diego, CA – July 8, 2013 – CLR Roasters, a wholly owned subsidiary of Youngevity International Inc. (OTCQX: YGYI) (, announced today that it has signed an agreement with Marketing Management Inc’s (MMI) subsidiary brokerage firm Market Solution Inc. (MSI), to represent CLR Roaster’s Café La Rica Espresso and Josie’s Java House ground coffee brands on a nationwide sales campaign.

Café La Rica holds the third place in sales per unit through Walmart stores with a recent increase of 46%. Over the past 52 weeks, Café La Rica has seen a sales increase of over 300% through Winn-Dixie stores. Café La Rica has also been authorized for sale in 318 Publix Super Market locations in Florida.

Josie’s Java House is a boutique styled ground coffee that comes in a variety of blends and flavors. In 2014, the Josie’s Java House line is to be expanded to include Hazelnut Cream through Walmart.

Café La Rica and Josie’s Java House coffees have full distribution through Sedano’s Supermarkets, the largest Hispanic Supermarket chain in the country. As well as being distributed by Associated Grocers, which services 450 independent stores throughout the state of Florida. Discount Drug Mart has added the Josie’s coffee line and Café La Rica Espresso to all 72 of their stores in Ohio with repeat orders. (Read the full Press Release)

CVSL And Tomboy Tools Sign Letter Of Intent   MarketWatch


CVSL And Tomboy Tools Sign Letter Of Intent


DALLAS and DENVER, July 12, 2013 /PRNewswire via COMTEX/ — Tomboy Tools, Inc., an Entrepreneur Magazine “Top 100 Brilliant Company,” and CVSL Inc. [stock symbol: CVSL] announced today that they have signed a letter of intent for Tomboy Tools to become part of CVSL’s family of direct selling companies. (Read Full Press Release)


Blyth Inc. Is NYSE’s Most Hated Stock: Should It Be Your Most Loved?

If short interest as a percent of equity float is an indicator of popularity, Blyth Inc. (BTH) is the most hated stock on the NYSE. However, an in-depth look into the company reveals some key factors that may create an extremely positive risk reward. The market is currently offering shares at unsustainably low valuation, four times management’s 2013 cash flow guidance. Pessimism toward the company is extreme with 75% of the current float short. Management is aggressively repurchasing shares of the company. 14% of the equity float has been repurchased in the last three quarters at higher stock prices than today. The company has repositioned its balance sheet resulting in nearly five years prior to its senior notes maturing. The company’s largest business segment and the focus of the short sellers, appears to be turning a corner. Now may be the perfect time to become a contrarian and invest in Blyth Inc. (Read The Full Report)


Government guidelines soon to differentiate genuine, ponzi schemes

To make a clear distinction between genuine direct-selling companies and fraudulent ponzi schemes, the government will soon put in place a set of ‘model guidelines’ to be followed by different states in such cases.

“These guidelines are close to being finalised by the Consumer Affairs Ministry and the Corporate Affairs Ministry has given its suggestions and other inputs in this regard,” union minister Sachin Pilot said.

“There was a meeting of consumers affairs secretary,corporate affairs secretary, myself and other stakeholders on the issue. Once we put these standard guidelines in place, the ambiguities about genuine companies and fraudulent schemes would go away,” the corporate affairs minister told PTI in an interview here. (Read Full Report Here)

Direct Selling

Direct selling is a business model that offers entrepreneurial opportunities to individuals as independent contractors to market and/or sell products and services, typically outside of a fixed retail establishment, through one-to-one selling, in-home product demonstrations or online. Compensation is ultimately based on sales and may be earned based on personal sales and/or the sales of others in their sales organizations.

Direct sellers may be called distributors, representatives, consultants or various other titles. They may participate in various ways, including selling the products themselves or through their sales organizations, providing training and leadership to their sales organizations, referring customers to the company and purchasing products and services for personal use.

Direct Selling Assocation


Network Marketing Pros In The News

Doug DeVos and Steve Van Andel (Amway) have been named Business Persons of the Year by the Economic Club of Grand Rapids. They were honored at a dinner at DeVos Place that was headlined by Hillary Clinton, former secretary of state, U.S. senator and first lady. Steve was also named Chairman of the Board of the U.S. Chamber of Commerce this week, where he will serve a one-year term.

Kirsten Aguilar (Vice President of Marketing) and Leslie Boyd-Bradley (Director of Distributor Development) have been named to SeneGence’s non-profit organization, the Make Sense Foundation.

Diahanna Brown, Vice President, Worldwide Events and Promotions for Herbalife, was awarded the Humanitarian of the Year Award by Union Rescue Mission in Los Angeles.

Steve Hastings has been appointed Executive Vice President of Sales & Marketing for RelivBrett Hastings has been appointed Senior Vice President and Chief Operating Officer.

Juliet Morgan has been appointed Chief Marketing Officer at foru international.

Mark Patterson has been promoted to Executive Vice President of Vemma.

Andre Peterson, former Director of Global Public Relations of Morinda Bioactives, passed away in his home on June 1, 2013. Andre had been with Morinda Bioactives for 12 years, having also worked at WordPerfect and Managed Wealth Financial.

Monica Wood is now Vice President of Consumer and Distributor Insights forHerbalife.

Network Marketing Companies In The News

The 11th Annual American Business Awards, aka the Stevie Awards, were presented to honorees during a gala banquet on June 17, 2013 in Chicago. The second round of winners will be announced on Sept. 16, 2013 in San Francisco. DSA congratulates the following direct selling companies for their achievements.


  • Bronze Stevie Award—ACN’s 20th Anniversary Celebration—Best Tradeshow or Convention
  • Bronze Stevie Award—ACN Celebrates 20 Year Anniversary—Motivational Video


  • Bronze Stevie Award—Isagenix Celebration 2012—Live Event
  • Bronze Stevie Award—IsaDerby—Best Internal Recognition/Motivational Event
  • Bronze Stevie Award—Experience Isagenix—PR Video
  • Bronze Stevie Award—Company of the Year—Health Products & Services

Pending member North American Power

  • Gold Stevie Award—Management Team of the Year—Consumer Services Industries

Rodan + Fields Dermatologists

  • Gold Stevie Award—Company of the Year—Consumer Products—Durables

Stream Energy

  • Silver Stevie Award—Paul Thies, Senior Director of Communications—Communications Professional of the Year


  • Gold Stevie Award—Management Team of the Year—Consumer Products Industries
  • Silver Stevie Award—Communications or PR Campaign/Program of the Year—Social Media Focused
  • Silver Stevie Award—Dan Macuga, Chief Communications Officer—Communications, Investor Relations or PR Executive of the Year
  • Silver Stevie Award—Human Resources Department of the Year—Health Products and Services
  • Silver Stevie Award—USANA Corporate Rebrand—Brand Executive of the Year—Health Products & Services and Pharmaceuticals
  • Bronze Stevie Award—Ashley Collins, Executive Director of PR and Social Media—Communications, Investor Relations or PR Executive of the Year
  • Bronze Stevie Award—Dave Wentz, CEO—Executive of the Year—Health Products & Services
  • Bronze Stevie Award—USANA 2012 International Convention—Best Tradeshow or Convention
  • Bronze Stevie Award—Doug Braun, Chief Marketing Officer—Marketing Executive of the Year


  • Silver Stevie Award—BK Boreyko, Founder and CEO—Executive of the Year—Health Products & Services
  • Bronze Stevie Award—Vemma Revolution Convention—Best Tradeshow or Convention
  • Bronze Stevie Award—Vemma Achieve Film Series—Motivational Video
  • Bronze Stevie Award—This is Vemma! Welcome to the Revolution—PR Video
  • Bronze Stevie Award—Verve Bold Launch—Marketing Campaign of the Year—Health Products & Services

AL International, parent company of non-member Youngevity, has changed its name to Youngevity International, Inc., and will trade under the stock ticker “YGYI.”

Amway is teaming up with KaBOOM! to build a new playground at the Indian Trails Camp in Tallmadge Township, Mich. The camp provides camping experiences for children and adults with disabilities.

Avon’s beauty and fashion boutique brand, mark, has named actress and singerLucy Hale a Beauty Ambassador. In the role, Hale will appear in mark Magalogs, as well as on mark and Avon digital platforms. She will also be the spokesperson for the m.powerment by mark campaign, the brand’s philanthropic effort dedicated to breaking the cycle of dating abuse and partner violence against young women.

Creative Memories recently announced that plans for layoffs, detailed in an April 16, 2013, notice, will no longer be happening. “We have been and will continue to make changes, but at this time we aren’t expecting any layoffs of that magnitude [163]. We want the business to go forward and we need people to do that,” said Chris Veit, CEO.

CUTCO/Vector Marketing recently presented Linda Price, Ph.D., department head and Underwood Family Professor of Marketing in the Eller College of Management at the University of Arizona, with its CUTCO/Vector Distinguished Marketing Award for Lifetime Contributions to Marketing Scholarship, endowed by Vector Marketing Corporation.

Herbalife was presented with an award for its corporate social responsibility by Global Views magazine in Taiwan. The award, in the “Care for the Community” category, was in recognition of Herbalife’s commitment to helping the development of youth baseball in Taiwan.

Immunotec has released its second quarter 2013 financial results. Total revenue for the three-month period reached $12.6 million, an increase of 10.6 percent as compared to the same period in the previous year. Total revenue in the six-month period reached $24.8 million, an increase of 10.4 percent as compared to the same period in the previous year. Network sales in the three-month period reached $11.2 million, an increase of nine percent as compared to the same period in the previous year. Network sales in the six-month period reached $22.4 million, an increase of 10.7 percent as compared to the same period in the previous year. View the full press release online.

Mannatech recently announced the launch of its Give for Real℠ program. This unique, donation-through-consumption initiative is designed to help consumers and social entrepreneurs meet the needs of malnourished children around the world. For every purchase on an automatic order containing certain products, a donation of PhytoMatrix® bulk dietary supplement is provided through MannaRelief to children in need worldwide. MannaRelief is an independent, nonprofit organization.

Mary Kay donated $326,400 to the China Women’s Development Foundation to fund a micro-credit project for women in southwest China’s Chongqing Municipality. The funds will go toward helping poverty-stricken women start their own businesses.

In additional company news, Mary Kay has partnered with Jordyn Wieber, the reigning Olympic gold medal gymnast, to raise awareness of teen dating abuse as the official spokesperson of Mary Kay’s “Don’t Look Away” campaign to help prevent and end dating abuse.

Nu Skin will be opening its Innovation Center in October in Provo, Utah. The facility includes two restaurants (both open to the public), a water feature in the 18,000-square-foot, four-story atrium, walking and hanging gardens, a state-of-the-art fitness facility and a two-story glass pavilion with mountain vista views.

Pending member Origami Owl has made the following staff appointments:

  • Robin Crossman is now the company’s Chief Executive Officer
  • Deb Bursley is Senior Vice President, Marketing and Communications
  • Kym Gonzales is Vice President, New Market Development
  • Pam Mercado is Vice President, Sales Strategy and Incentives
  • Tracey Vlahos is Executive Director, Field Sales Development

PartyLite is a recipient of Manufacturing Executive’s 2013 Manufacturing Leadership 100 Award. The company’s winning project in the Global Value Chain category highlights its successful program to optimize its supply chain through the use of Logility Voyager Solutions™. The Manufacturing Leadership 100 Awards (ML100), presented by Manufacturing Executive, honor manufacturing companies and individual manufacturing leaders who help shape the future of global manufacturing.

In additional company news, PartyLite sponsored and participated in the Relay for Life of Greater Plymouth (Mass.) recently. The event is an annual fundraiser for the American Cancer Society.

Primerica held its 2013 conference last week at the Georgia Dome. Approximately 35,000 distributors attended the event.

Scentsy recently donated $123,000 to the Special Olympics International. Orville and Heidi Thompson presented the check to representatives from Special Olympics International and member Lauren Schmellick, an Idaho contestant in the 2011 Special Olympics Summer World Games in Athens, Greece, during a ceremony. The money was raised through the sales of its fall and winter special release candle, “Champion.”

Distributors who attended Talk Fusion’s “Believe” corporate event, held recently in Russia, raised a total of $80,000 to benefit Rusfond USA to pay for three surgeries for a Ukrainian toddler suffering from spina bifida.

WineShop At Home has moved into a new 20,000-square-foot facility in Napa Valley, Calif., at the Gateway Business Park.

WorldVentures has launched a Trust Council to measure, audit, counsel and advocate company practices and behaviors in the field and at the corporate office. The council includes corporate executives as well as independent representatives.




Breaking MLM News: The Direct Selling Assocation Releases The 2012 Direct Sales Figures


Each year the Direct Selling Association (DSA), releases the USA financial figures and statistical information covering companies which utilize one of the following marketing, compensation and distribution models… MLM, Network Marketing, Party Plan, and Single Level structures. The numbers and stats from 2012 truly show a positive tick upwards.

Source Direct Selling Association

Source Direct Selling Association