Questions

Multilevel marketing is a legitimate business strategy, though it is controversial. These schemes involve taking advantage of people by pretending to be engaged in legitimate multilevel or network marketing. An issue in determining the legitimacy of a multilevel marketing company is whether it sells its products primarily to consumers or to its members who must recruit new members to buy their products. If it is the former, the company is likely a legitimate multilevel marketer. The Federal Trade Commission has been investigating multilevel marketing companies for several decades and has found many with practices that are difficult to determine as legitimate. Herbalife Nutrition Ltd. is a high-profile, multilevel marketing company that manufactures and distributes weight-loss and nutritional products, with more than 500,000 distributors. Although the FTC has investigated Herbalife, it was activist investor William Ackman, who shed a national spotlight on the company by shorting $1 billion of the company’s stock in 2012. Ackman accused the company of operating a pyramid scheme and backed his allegations with a bet the company’s stock price would fall under the weight of the scam.
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Answered 3 years ago

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