BULLETIN: Sen. Edward J. Markey, D.-Mass., has called for an investigation of Herbalife, an MLM program.
“There is nothing nutritional about possible pyramid schemes that promise financial benefit but result in economic ruin for vulnerable families,” Markey said in a statement. “Herbalife may be a purveyor of health and wellness products, but some of its distributors are suffering serious economic ill-health as a result of their involvement in the company. I have serious questions about the business practices of Herbalife and their impact on my constituents, and I look forward to receiving responses to my inquiries.”
Markey is a member of the Commerce, Science and Transportation Committee.
On Sept. 5, 2013, Tito Jackson, a Boston city councillor, asked FTC Chairwoman Edith Ramirez to open an investigation into Herbalife’s business practices.
In a letter to Ramirez, Jackson said he feared Herbalife is a pyramid scheme that “pr[e]ys on disadvantaged populations.”
Markey has asked both the FTC and the SEC to open Herbalife probes.
From a statement by Markey’s office today (italics added):
One family in Norton, Massachusetts reported that it lost $130,000, including the family’s entire 401(K), investing in Herbalife. Another Massachusetts resident claimed that she was encouraged to recruit new members by approaching her family and also received pressure to spend money to buy more Herbalife products so that she could qualify as a so-called “Supervisor” in the Herbalife system. She also stated that she was encouraged to stay in the program even after she said she wanted out.
Herbalife stock fell about 10.35 percent today, to $65.92, on the news of Markey’s call for probes.
The company denies it is a pyramid scheme.