Herbalife Key Documentation Regarding “Deception” Left On Sidelines [Part II]

Mark Melin

Published onSeptember 23, 2015

Updated on May 13, 2021

Continued from Part I...

Table of Contents

What constitutes an illegal pyramid scheme?

While many surrounding the issue appear to have conflicting interpretations, a source close to Herbalife told ValueWalk their version of truth on the issue of regulatory clarity on the "pyramid" scheme issue was that the rules are generally clear:

Pyramid schemes are illegal because they are inherently deceptive and therefore illegal under Section 5(a) of the Federal Trade Commission Act (unfair or deceptive act or practice). The legal definition has been clear and unchanging since 1975 (the Koscot Test): "Such schemes are characterized by the payment...

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Mark Melin

Mark Melin is an alternative investment practitioner whose specialty is recognizing the impact of beta market environment on a technical trading strategy. A portfolio and industry consultant, wrote or edited three books including High Performance Managed Futures (Wiley 2010) and The Chicago Board of Trade’s Handbook of Futures and Options (McGraw-Hill 2008) and taught a course at Northwestern University's executive education program.

Herbalife Key Documentation Regarding “Deception” Left On Sidelines [Part II]

What constitutes an illegal pyramid scheme?

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