Archives on September, 2013

From PatrickPretty: SEC Sanctions Troy Dooly

Posted by ASDUpdates on September 30, 2013No Comments

BULLETIN: SEC Sanctions Troy Dooly For Zeek-Related Work; MLMHelpDesk Blogger Ordered To Pay More Than $6,000 In Disgorgement, Penalties And Interest

By 6:41 pm Sep 30, 2013

breakingnews72BULLETIN: (UPDATED 9:04 P.M. EDT (U.S.A.) The SEC has sanctioned MLMHelpDesk Blogger Adam “Troy” Dooly, amid allegations he accepted money from the Zeek Rewards MLM “program” operated by Rex Venture Group LLC without disclosing to Blog readers and radio listeners that Rex “was paying him” to publicize the Zeek venture.

Section 17(b) of the Securities Act “prohibits publishing, giving publicity, or circulating ‘any notice, circular, advertisement . . . or communication which, though not purporting to offer a security for sale, describes such security for a consideration received or to be received, directly or indirectly, from an issuer . . . without fully disclosing the receipt, whether past or prospective, of such consideration and the amount thereof,’” the SEC said.

Zeek has been described by the SEC in court papers (August 2012) as a $600 million Ponzi- and pyramid fraud that was selling unregistered securities as investment contracts. Dooly consented to the sanctions and an accompanying cease-and-desist order without admitting or denying wrongdoing.

“In each instance of public relations or promotion in various media outlets, Dooly failed to disclose to his readers and listeners that RVG was paying him for such publicity,” the SEC asserted in an administrative filing dated today. “Dooly believed that, pursuant to a non-disclosure agreement, RVG maintained the exclusive right to determine whether or not to disclose Dooly’s consulting agreement and the amount of compensation. Because RVG did not authorize such disclosure, Dooly declined to reveal his compensation and, in at least one instance, Dooly denied (or misled his audience about) receiving compensation from RVG (apart from reimbursement of expenses) when asked about his compensation during a public radio program.

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From BehindMLM: Rippln CEO apologizes for “failed expectations”

Posted by ASDUpdates on September 29, 2013No Comments

Rippln CEO apologizes for “failed expectations”

Sep.28, 2013 in Rippln 21 Comments

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In the next 30 days, a new social network is going to be released to the world.

You will hear about it on your favorite blogs and on TV.. The news will cover it… And not only will your friends and family members be talking about it, but complete strangers will also approach you about it…

Because the technology involved will not only change how we communicate, it will also change how commerce, both online and offline, happens.

-Official Rippln marketing copy, supplied to affiliates circa June 2013 and reproduced on over 200,000 webpages (Google)

To borrow a tired joke; If I was to look up the hype in an MLM dictionary, I’d probably see a copy of Rippln’s logo. No further explanation required.

After going live with the marketing copy above and copious similar efforts, here’s a rundown of the Rippln MLM business opportunity today.

Just short of two months ago Rippln’s Facebook page came alive with marketing for a smart watch. ‘Rippln beats Apple to market with James Bond style Voice activated smart watch‘ the hype machine megaphones blared across the internet.

Third-party reviews however were not so flattering. Edward Baig from USA Today wrote:

It’s got some cool features. But it’s also a pricey product with limited mainstream appeal, and one with some features that were either too complicated or didn’t work at all.

Will Greenwald from PCMag was also critical of the watch, writing

All told, the Martian Passport Watch is an interesting novelty, but it’s too expensive and too limited to justify the $300 price. Its OLED screen and speakerphone function feel more like a next-gen smart watch from the late 1990s or early 2000s than a must-have accessory for 2013.

Meanwhile the general consensus amongst Rippln affiliates, as observed on various social media platforms, was that essentially you were paying $300 for a bluetooth extension for your phone.

Rippln’s smartwatch, manufactured by Martian through a Kickstarter project, went live in September and… well I’m not really sure what happened after that. Come September the buzz surrounding the watch had died out completely.

Following the coming and going of the Martian SmartWatch, Rippln then introduced the Photo Guessaroo app.

A few weeks later after Photo Guessaroo was approved by Apple for distribution through their App Store, here’s how that’s going:

photo-guessaroo-apple-app-store-stats-rippln

The latest is what appears to be a task-orientated personal development course, created by Rippln co-founder Jim Bunch. Called “The Ultimate Game of Life”, Rippln are hoping affiliates will fork up $497 for the 90 day course.

Rippln’s initially announced “bigger than email” flagship product, the Communicator App, is still MIA with as yet no confirmed release date set.

How has this translated over for Rippln’s affiliates? In a recent blog post titled “Why I left Rippln“, former Rippln affiliate Wes Wyatt shared some figures:

I’m not sure what the fruit to money ratio actually is – but in my case with 3581 (A number most people in Rippln would NEVER see a tenth of) – I’d earned $32.95.

Those with much lower numbers (The majority of those in Rippln) went in the hole by $1.50 when they activated their account.

The top guy in Rippln saw a LOW 4-Figure Payout.

Shortly after Rippln’s first commission run Rippln affiliates with sizeable downlines began to sell their accounts, with at least one “corporate approved” for sale notice appearing on Rippln’s own Facebook page.

In response to all of this playing out over the past few weeks, Rippln recently uploaded a video in which CEO Brian Underwood apologises for Rippln’s failure to meet expectations.

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From BehindMLM: TelexFree Bankruptcy Denied, BBOM Fraud Thwarted

Posted by ASDUpdates on September 24, 2013No Comments

TelexFree bankruptcy denied, BBOM fraud thwarted

Sep.24, 2013 in companies, TelexFree 1 Comment

Brazilian regulators are currently on fire in their handling of both the TelexFree and BBOM Ponzi scheme fraud cases.

Setting an example that India and other countries drowning in Ponzi and pyramid scheme fraud would do well to follow, Monday firstly saw TelexFree denied their bankruptcy protection application and then on Tuesday, the uncovering of a fresh $8.6 million USD fraudulent transfer attempt by BBOM that prosecutors managed to thwart.

[Read the rest of this entry…]

From BehindMLM: TelexFree vows recovery in Bankruptcy Protection

Posted by ASDUpdates on September 22, 20132 Comments

 


TelexFree vows recovery in Bankruptcy Protection

Sep.21, 2013 in TelexFree 8 Comments

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If the injunction continues TelexFree may enter into bankruptcy.

Should the company spend a few more days being prohibited from signing up new investors, they would have no money to pay the old ones.

-Djacir Falcão, one of TelexFree’s lawyers explaining on July 10th why the Acre injunction should be lifted

News broke yesterday on BehindMLM that TelexFree was entertaining the idea of applying for Bankruptcy Protection in Brazil.

The comment was accompanied by a TelexFree Facebook notice, informing the company’s affiliate investors that owner Carlos Costa would shortly be putting up a video explaining the move.

Less than twenty-four hours later Costa came through, announcing, amongst other things, that on Thursday the 19th TelexFree had indeed filed for Bankruptcy Protection in the Brazilian state of Espírito Santo.

In both the TelexFree Facebook announcement and Carlos Costa’s video, it is claimed that the company filing for bankruptcy is to “protect its affiliates”. But is that really the case?

Having failed to convince judges in Brazil to lift the business crippling Acre injunction, handed down in June which prohibits TelexFree from recruiting new investors and paying out existing ones, the main thrust behind the bankruptcy protection filing appears to be the belief that TelexFree will be able to present an alternative business model to the courts, and more importantly this time have it accepted.

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From “A MLM Skeptic”: MLM Mythbusting: When Will DSA Recognize the Danger of Product-Based Pyramid Scheme to the MLM Industry?

Posted by ASDUpdates on September 22, 2013No Comments

Saturday, September 21, 2013

MLM Mythbusting: When Will DSA Recognize the Danger of Product-Based Pyramid Scheme to the MLM Industry?

DSA, or Direct Selling Association, is the “industry group” of network marketing, direct selling, multi-level marketing… whatever companies. It periodically holds surveys, and has a code of ethics that it requires its members to adhere to, which it claims will protect the consumers and affiliates from unscrupulous companies. DSA thus far has done an admirable job, both in Public Relations, and Industry Watchdog. However, DSA has a severe blindspot: DSA does NOT acknowledge the existence of product-based pyramid schemes and how similar it is to MLM, and that denial may lead to the destruction of itself and the industry it serves.

DSA pretends that “product-based pyramid scheme” doesn’t exist, by pushing multiple narratives which are myths, not reality:

  • MYTH: “Internal consumption is legitimate”
    REALITY: Internal consumption is legitimate… only in “reasonable” amounts, else it is indistinguishable from product-based pyramid scheme
  • MYTH: “There is a CLEAR divide between pyramid scheme and MLM”
    REALITY: “Product-based pyramid scheme” is VERY close to MLM and this clear divide no longer exist. It’s one huge gray area.
  • MYTH: “Pyramid schemes rarely involve products. If they do, they aren’t worth much.”
    REALITY: “Product-based pyramid schemes involve actual ‘legitimate’ MLM type products.”

It recently re-emphasized these blindspots by pushing its article “The difference between legitimate direct selling companies and illegal pyramid schemes” which again emphasized the three myths, which is no surprise as this was penned with the assistance of mlm attorney Jeff Babener, whom I have previously identified as having a bit of blindspot himself 

Let us go over each myth on why each is a myth, and what is the reality.

From MLMAttorney: Bill Ackman Throws a Hail Mary: warns auditing firm about liability if they validate Herbalife

Posted by ASDUpdates on September 16, 2013One Comment
by on September 13, 2013

Bill Ackman Throws a Hail Mary: warns auditing firm about liability if they validate Herbalife

Please click this link to watch a full video update.

Ackman Warns PwC

In an attempt to thwart the inevitable short squeeze on Herbalife’s stock, Bill Ackman has recently turned to “warning” PricewaterhouseCoopers of potential exposure if they validate Herbalife’s accounting. The letter is included in full below. Irrespective of the fact that PwC has been in business for over 150 years and have maintained a stellar reputation among auditing firms, Ackman felt the need to educate them on accounting. In the letter, he sites a number of issues with Herbalife’s numbers, none of which will be addressed here because, candidly, I have no idea what it all means. However, I do trust analyst Tim Ramey. He wrote a solid rebuttal to Ackman’s letter, which was included on ValueWalk. The key bullets:

The opening point in the PWC letter is that Herbalife is a pyramid scheme, and PWC will have risk if it audits the Herbalife books and does not disclose that fact. The remainder of the 52 pages does absolutely nothing to prove or allege the pyramid scheme hypothesis. Remarkable.

The letter is an eleven-point discussion of various accounting treatments that Herbalife and its previous auditors have taken. We did not see a single “smoking gun” or anything that would cause us meaningful concern. There are audit-type questions, something that two accountants might have a spirited discussion about at a cocktail party, but nothing that seems material. If this is all Ackman has after millions spent on forensic accounting, Ackman has been cheated. On some of the points Pershing Square is just wrong, in our opinion; a risk you take when your securities analysis does not ever engage in a dialog with the company.

What Does This All Mean?

It’s the fourth quarter with 2 minutes left on the clock. The ball is on Ackman’s 5 yard line. He’s down by 16. He needs to traverse the field, score a touchdown, get a two-point conversion, recover the onside kick, score another touchdown and get another two point conversion. Ackman claims to be armed with the “truth;” however, it’s his version of the truth. In order to pull out of his self-induced tailspin, he needs two things to happen: He needs Herbalife to report a decrease in earnings next quarter (not likely to happen). And he needs, more than anything, the FTC to take action. The FTC is NOT going to take action. Care to know why? (1) HERBALIFE IS NOT A PYRAMID SCHEME; and (2), the existing regulations leave plenty of room for debate on both sides. If there were a lawsuit, the FTC would lose. Plain and simple. The FTC, in my opinion, is not equipped to target companies in the gray. They’ve got to go after the easy targets. And Herbalife, without question, does not fit that definition.

You can  click here to download the letter.

From BehindMLM: 14th TelexFree Acre injunction appeal denied

Posted by ASDUpdates on September 15, 2013No Comments

14th TelexFree Acre injunction appeal denied

Sep.15, 2013 in TelexFree

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With TelexFree themselves seemingly having exhausted their injunction appeal options over no less than thirteen separate appeals, all unanimously denied, the company’s affiliates have taken up the slack in the hope that they can convince a judge to lift the Acre injunction.

The Acre injunction, granted to Public Prosecutors back in June, prohibits TelexFree from paying affiliates in Brazil or signing up new affiliate investors.

Fifty-two TelexFree affiliates filed an application for an injunction against the Acre injunction. The group of affiliates claimed that the decision to effectively put a stop to TelexFree’s Brazilian operations is illegal because it infringed on their right to participate in the opportunity and earn from it.

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From behindMLM: Global Payroll Gateway processor drops TelexFree

Posted by ASDUpdates on September 14, 2013No Comments

 


Global Payroll Gateway processor drops TelexFree

Sep.14, 2013 in TelexFree

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In yet another blow to TelexFree’s non-Brazilian operations, today Global Payroll Gateway announced that they were dropping the company.

Global Payroll Gateway’s announcement comes on the back of weeks of commission delays for TelexFree’s affiliates, with the company itself failing to pay affiliates for close to a month now.

[Read the rest of this entry…]

Zeek Rewards Docket Activity

Posted by ASDUpdates on September 13, 2013No Comments

Securities and Exchange Commission v. Rex Venture Group, LLC et al
Graham Mullen, presiding
Date filed: 08/17/2012
Date of last filing: 09/11/2013
 

History

Doc.
No.
Dates Description
Filed & Entered:   09/11/2013
Docket Text Order on Motion to Seal

Full docket text:
TEXT-ONLY ORDER granting [105] Motion to Seal. Entered by Senior Judge Graham Mullen on 9/11/2013. (Pro se litigant served by US Mail.)(stb)

The text of Doc 105 reads as follows:

NOW COMES Defendant Paul Burks, through undersigned counsel, pursuant to Local Civil Rule 6.1, and respectfully moves this Honorable Court to permit Mr. Burks to file a motion under seal. The motion and its attachments, which are being filed separately and under seal for the Court’s review, concern privileged or otherwise protected information. Among other things, the motion and its attachment implicate matters concerning the attorney-client privilege and work product protections. Mr. Burks respectfully requests that the motion and its attachments be permitted to be filed under seal, and that they remain sealed until further order of the Court.

From BehindMLM: TelexFree’s 13th appeal denied in Supreme Court

Posted by ASDUpdates on September 9, 2013No Comments

 


TelexFree’s 13th appeal denied in Supreme Court

Sep.09, 2013 in TelexFree

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Another week, another TelexFree appeal rejected by the courts of Brazil.

Shortly after TelexFree’s twelfth appeal was denied in the Acre Superior Court in late August, TelexFree rushed off to the Supreme Court to file for a Preventative Action preliminary injunction against the existing Acre Public Prosecutor’s injunction against the company.

Having initially failed to convince a single Judge in Brazil that they weren’t a Ponzi scheme, of late TelexFree has attempted to have the injunction lifted on legal technicalities. An effort that has proved as in effective as arguing their case on the merits of the TelexFree business model.

Their latest attempt, filed in the Supreme Court somewhere between the 28th and 30th of August, saw the company demand the Acre injunction be lifted on the grounds that the company “would never be succesful” obtaining an appeal from the lower courts.

With no legal precedent or basis to argue their appeal on, not surprisingly the Judge hearing the case was quick to deny it.

[Read the rest of this entry…]