Herbalife: Has The DSA And Multilevel Marketing Given Up On Retailing?

Herbalife: Has The DSA And Multilevel Marketing Given Up On Retailing? by William Keep, Seeking Alpha

Summary

• DSA 2013 reports the number of "Direct Sales Representatives"; DSA 2014 reports the number of "People Involved in Direct Selling." Involved doing what?
• DSA says whether the customer is a distributor is "immaterial"; Vemma and BurnLounge courts say otherwise (DSA also claimed to "perfect" the definition of pyramid scheme).
• Vemma and BurnLounge notice to Herbalife and others: effective anti-pyramid scheme safeguards (e.g., Amway '79) still relevant.

Investors know well the risks of "retailing".

You have seen the numbers. Upwards of eighteen million adults -- more than 8% of adult Americans -- participate in direct selling (overwhelmingly MLM), presumably to earn part- or full-time income. Despite accounting...