Disqus - Friends of MattWells

Re: BBB warns about alleged pyramid scheme

Len Clements — Sat, 22 Aug 2009 15:08:00 -0000

We have performed an extensive investigation of iJango. Commentary regarding our findings can be found in the 8/16/09 podcast here: http://www.marketwaveinc.co....
We strongly concur with the findings of the BBB.

Len Clements
Founder & CEO
MarketWave, Inc.

Re: NMPRO #193 – An MLM Expert Weighs In – Part 1 of 2

Len Clements — Thu, 10 Dec 2009 13:30:57 -0000

Hi Alfredo,

Thanks for the positive feedback. I'm 51.

Len

Re: Barry Minkow 2.0

Len Clements — Thu, 14 Oct 2010 00:44:00 -0000

Thank you, Beth! A media exposé of Minkow's current shady activity is long overdue.

I'm curious, though, why there was no mention at all of Usana Health Sciences (USNA), in spite of the fact it is one, if not arguably the very best, example of the type of deceptive market manipulations and media bias related to Minkow that you are reporting on here?

Minkow hit Usana with a litany of charges in March of 2007, including being an illegal pyramid scheme, which caused their stock to drop 15% the day his hit piece was published - and TWSJ's obligatory reporting of it. His numerous anti-Usana reports and YouTube videos garnered an SEC investigation and three class action lawsuits - one derivative, one shareholder and one distributor - all making virtually identical claims against Usana as appeared in Minkow's initial 86 page report, often verbatim. The SEC "inquiry" found nothing even worthy of further investigation, two of the lawsuits were dropped by the plaintiff, and one was dismissed on summary with the judge stating the accusations against Usana were not even "plausible". Yet, Minkow claimed under oath that he made over $61,000 on his Usana puts.

He also revealed during his deposition (after Usana sued him) that he was paid over $200,000 by three other Usana short sellers for his Usana "investigation", one being fellow stock fraud felon Sam Antar. Usana settled with Minkow agreeing to remove all of his online anti-Usana propaganda and to never comment on Usana again.

There is an abundance of research and data related to his Usana attack here:

http://www.marketwaveinc.co...
http://www.marketwaveinc.co...
http://www.marketwaveinc.co...
http://www.marketwaveinc.co...
http://www.marketwaveinc.co...
http://www.marketwaveinc.co...

http://www.marketwaveinc.co...
http://www.marketwaveinc.co...
http://www.marketwaveinc.co...
http://www.marketwaveinc.co...
http://www.marketwaveinc.co...
http://www.marketwaveinc.co...
http://www.marketwaveinc.co...
http://www.marketwaveinc.co...
http://www.marketwaveinc.co...

Thank you for allowing me to publish this additional information. There is a great deal more that I have not yet published related to Minkow's more recent activities (unrelated to Usana). Please contact me at 800-688-4766 if you would like to know more.

Keep up the great work.

Len Clements
Founder & CEO
MarketWave, Inc.

Re: USA Today Reports on MLM: point for point response

Len Clements — Sat, 12 Feb 2011 20:29:38 -0000

Kevin,

Great response to the USA Today article.

As for Tex, I once admired and respected his efforts and passion towards cleaning up the tools business in Amway. However, Amway has since reigned in the abuses related to these tools schemes in recent years, which was even back then related only to two, al beit large, factions within Amway, not Amway as a whole. Yes, their motives for offering greater protection from abusive tools schemes may not be entirely pure (i.e. more by force in some cases, such as in the UK), and their is still more progress that can be made. But when you're obsessed with a cause to the extent that Tex clearly is, you desperately NEED that cause to exist. No matter what Amway does at this point, Tex is going to attack them - and those of us who are anything less than 100% in support of his agenda.

Len

Re: State of supplements: Elusive wealth, irresistible lure | The Salt Lake Tribune

Len Clements — Fri, 25 Feb 2011 17:59:57 -0000

An open Response Letter to Mr. Oberbeck...

http://www.MarketWaveInc.co...

Thank you for your consideration.

Len Clements
MarketWave, Inc.

Re: Protected Blog › Login

Len Clements — Thu, 02 Jun 2011 19:36:21 -0000

Zac, you've written a lot of ignorant commentary on MLM in the past, but wow... you've really topped yourself here.

First of all, no one gets paid, even "in part", for recruiting new reps into an MLM program.

And no, Bethany is not teaching people how to be an "Amway distributor", they are teaching students how to be a better network marketing distributor - for ANY company. Amway has nothing even remotely to do with Bethany's MLM degree program.

Finally, we all agree (both the pro- and con- side of the MLM argument) that the large majority of MLM reps fail to make a profit, and many do pursue their businesses in an overly-hyped manner. But let's be clear on WHY so many fail. As anyone with any practical, real world experience in MLM would know (that eliminates you and Tracy Coenen) the large majority fail because the large majority fail to do what they are suppose to do, well enough, long enough. And yes, they erroneously present the business as something that is "easy" and takes little experience and minimal skills. But first you criticize MLM for practicing such deception, then when someone actually steps up to correct this behavior you mock and belittle them. And then, ironically, you attempt to discredit them by countering their efforts to raise the level of professionalism and lower the level of hype by throwing the very type of hype at them that they are trying to eliminate! If we say success in MLM is quick, easy, requires no special skills, and anyone can do it, we're spewing bogus hype by understating what is required to be successful (which is true). But now, if we say no, that's understating what is required to be successful, and you really need to learn the necessary skills, we're being hypocrites. So now, based on your logic, we're damned if we do and were damned if we don't.

BTW, I would have posted a response to Tracy Coenen on her blog, but this adamant defender of free speech and blogger's first amendment rights censored my last round of responses to her commentary and has blocked my ability to post any new responses.

Len Clements

MarketWave, Inc.

Re: Protected Blog › Login

Len Clements — Sun, 05 Jun 2011 15:49:30 -0000

Zac,

After reading Eric's thoughtful and respectful response I find myself feeling somewhat regretful about my own. I have read "How to Win Friends and Influence People", twice, and do try to practice its tenets. And, occasionally I fail.

As more of an explanation rather than an excuse, my tone was somewhat contentious because I KNOW you already know all of the very valid and cogent points that have been made here, by all commenters, which are based on decades of overwhelming historical, legal, and mathematical precedence, yet you continue to ignore it all in lieu of the negative propaganda published by a very small, albeit prolific, clique of anti-MLM critics.

This is why I used the term "ignorant" in reference to your commentary about Bethany College. Ignorant does not imply a lack of intelligence, but the ignore-ance of readily available, easily verifiable, information.

Zac, I've been following your work for several years now and you are clearly a very astute and intelligent commentator. This is why your anti-MLM rhetoric is all the more bewildering and, yes, sometimes infuriating.

Your trusted sources, Robert FitzPatrick, Jon Taylor and Tracy Coenen, all firmly believe virtually all network marketing programs are illegal "product based pyramid schemes" in spite of the fact this is a 79 year old industry of over 10 million distributors in the U.S. alone, which is one of over 80 countries where it legally operates, and there are more than 2,200 such companies in the U.S. today, nine of which are over 40 years old. FitzPatrick, Taylor and Coenen firmly believe that every state and federal legal and regulatory authority that has declared this business model to be legal are all wrong, and only they are right.

How do you afford them so much credibility?

Len Clements

Re: http://www.signonsandiego.com/news/2011/jul/21/minkow-sentenced-five-years/

Len Clements — Thu, 21 Jul 2011 23:25:45 -0000

I have been investigating Barry Minkow since early 2007 and have published a number of detailed, extensive reports in an effort to expose the fact that he was absolutely NOT reformed and was still operating fraudulent stock manipulation and extortion schemes well before Lennar. This link here -- http://www.marketwaveinc.co... -- will download a Word document with an overview of this information. To my knowledge only one writer who was regularly covering Minkow's activities (for a major publication) has reviewed my material -- and then lamented how he wished he had read it sooner and immediately discontinued all commentary on Minkow. That was in late 2008. If more had listened perhaps Minkow might have been stopped years ago.

Re: Riptide 2.0 - Francisco Alvarado - Barry Minkow Has To Pay Lennar Corp. $583 million And Serve Five Years

Len Clements — Fri, 22 Jul 2011 15:53:37 -0000

I have been investigating Barry Minkow since early 2007 and have published a number of detailed, extensive reports in an effort to expose the fact that he was absolutely NOT reformed and was still operating fraudulent stock manipulation and extortion schemes well before Lennar. This link here — http://www.marketwaveinc.co... — will download a Word document with an overview of this information.Minkow committed the identical extortion and stock fraud scheme on several other companies before Lennar. The only difference was that these companies chose to pay Minkow off to end his attacks rather than spend years in court to accomplish the same thing.Minkow’s “redemption” was itself a fraud. The evidence was always there.

Re: Minkow Gets Five Years in Prison for Stock-Fraud Conspiracy - Businessweek

Len Clements — Sat, 23 Jul 2011 18:36:57 -0000

Minkow committed the identical extortion and stock fraud scheme on several other companies before Lennar. The only difference was that these companies chose to pay Minkow off to end his attacks rather than spend years in court to accomplish the same thing.

Minkow’s “redemption” was itself a fraud. The evidence was always there.

Re: The Flash Mob Mentality of Scientific Inquiry

Len Clements — Thu, 25 Aug 2011 18:35:03 -0000

Here's a simple question that none of my religious friends can answer... Why does a chicken have wings that DON'T WORK? There's only three possibilities here: 1) these are vestigial wings that were once much larger, and functional; 2) these are wings where none once existed, that will someday become larger and functional, or; 3) they've always been small, rudimentary wings that were never functional (all this applies to Penguins, Ostrich's, Emus, and numerous other avian species). The antievolutionist has absolutely no choice but to choose option #3. However, this then begs the question, is God incompetent, or just cruel? What is a third possibility for why He would give an animal wings that serve utterly no purpose? At all. Ever. If there is a God, I choose to believe everything he designs has a purpose. Or it once had. Or it will have.

And don't even get me started on the appendix, or the coccyx bone.

Re: The Flash Mob Mentality of Scientific Inquiry

Len Clements — Thu, 25 Aug 2011 18:53:01 -0000

Which is an intellectual way of saying, "nu uh".

Why?

Re: The Flash Mob Mentality of Scientific Inquiry

Len Clements — Thu, 25 Aug 2011 19:18:06 -0000

I am using simple logic. Either a chicken's wings were smaller and became larger, were larger and became smaller, or they have always maintained the same size (and lack of functionality). I suppose we could pick some nits and add options such as, the wings have always been the same size but the bird itself was once much larger or smaller, but *any* other scenario besides everything always being the same clearly suggests the animal evolved. I posited that an antievolutionist would not choose any option that suggests an evolutionary process. Please explain why this is not logical.

I then posed two possibilities for God giving a bird wings that do not allow it to fly (or defend itself, or pick things up, or serve any purpose at all). Either He made a mistake (was incompetent), or was being cruel. I then asked for a third possibility. Can you provide one?

And for that matter, why *did* God give us an appendix and a coccyx bone? If, as an antievolutionist *must* suggest, this organ and bone have always served no purpose, what was God's purpose for installing them? I'm not asking for anyone to read God's mind. I'm just asking for a theory.

Re: The Flash Mob Mentality of Scientific Inquiry

Len Clements — Thu, 25 Aug 2011 19:43:19 -0000

We were discussing chicken wings (which is making me hungry), not moth wings.

Do you have a response to either of my questions?

Re: The Flash Mob Mentality of Scientific Inquiry

Len Clements — Thu, 25 Aug 2011 20:11:43 -0000

So, domestication and cross breading caused chicken's wings to shrink and become nonfunctional?

What was nature trying to adapt a chicken to by *eliminating* its ability to fly?

Wouldn't cross breading also occur in nature and cause the animal to... evolve?

Re: Chickens, eggs, leaders and products

Len Clements — Mon, 19 Dec 2011 12:40:35 -0000

Great products can genuinely create very successful leaders. Great leaders can only make you think they have great products.

"Transitory leader" is an oxymoron.

Len

Re: The Multibillion-Dollar Direct-Selling Industry Dodges the FTC

Len Clements — Mon, 23 Apr 2012 17:00:00 -0000

Ms. Klein,

Thank you for your fair and balanced treatment of this issue. Now for the "However"… :-)

However, the exemption of MLM companies from this NBOR always seems to be presented as a result of industry lobbying efforts or collusion within the FTC and never due to the actual merits of the arguments made against it.

MLMs were exempted because it WAS "not a good fit", and would have been utterly impotent in protecting consumers from fraud. After all, if someone is already intending to lie to you and cheat you out of your money, how likely is it they are going to be truthful on the disclosure statement they hand you? This rule would have done little more than give the crooks more credibility and create an unnecessary burden on the good companies.

Furthermore, some of the required disclosures either already applied to MLM (such as forbidding earnings claims sans numerous disclosures), or were obviously flawed on their face. For example, having to disclose all the lawsuits ever filed against you, even those that you won, or that were dropped, or dismissed on summary. Or, having to disclose contact information for 10 local references, creating a whole new "lead generation" method for unscrupulous fake "prospects".

There's no better outline of all the reasons why this New Rule was, in fact, "not a good fit" than within the comment submitted by attorney Gerald Nehra, titled "FTC: What Were You Thinking?".

http://www.ftc.gov/os/comme...

I've been an MLM advocate and consultant for over 21 years, and AGREE it should be more regulated. But this NBOR was clearly not the way to do it.

Len Clements

Re: Amway Joins Sellers Lobbying Against Distributor-Protection Rule

Len Clements — Fri, 22 Jun 2012 14:18:33 -0000

Ms. Klein,

To my knowledge, this is the second time you have reported on the issue of the FTC's New Business Opportunity Rule. Amway is absolutely not lobbying against this NBOR as it was finalized, with the FTC exempting MLM companies, several months ago.

Also, you continue to promote the illusion that this exemption was as a result of industry lobbying efforts or collusion within the FTC, and once again have ignored the actual merits of the arguments made against it. This begs the question, have you actually read any of the counter arguments?

When the FTC claims their internal study concluded "“the rule would not work very well with the MLM business model", why is this obvious truth so hard to accept? The NBOR so clearly would have been utterly impotent in protecting consumers from fraud. If someone is already intending to lie to you and cheat you out of your money, how likely is it they are going to be truthful on the disclosure statement they hand you? This rule would have done little more than give the crooks more credibility and create an unnecessary burden on the good companies.

There's no better outline of all the reasons why this New Rule was, in fact, "not a good fit" than within the comment submitted by attorney Gerald Nehra, titled "FTC: What Were You Thinking?".

http://www.ftc.gov/os/comme...

I've been an MLM advocate and consultant for over 21 years, and agree it should be more regulated. But this NBOR was clearly not the way to do it.

Len Clements

Re: Students should approach network marketing companies with caution

Len Clements — Wed, 03 Apr 2013 13:09:16 -0000

Austin, I think you need to do a little more homework on Vemma (which I am not affiliated with). You failed to mention that the $500 and $1,000 product packages are completely optional, and Vemma reps may join with what ever amount of product they wish (including *none*).

Also, you ironically pointed out that Vemma's “Getting Started” section of their website "does not mention that money is due each month to remain a company representative". What you do not mention (or sincerely did not realize) was that this monthly quota can be met by sales to others, and need not be purchased by the rep themselves.

And yes, a small percentage of MLM reps make substantial incomes, but not due to any flaw in the geometric compensation model. Very few earn large incomes because very few do what they are suppose to do, well enough, long enough, to earn large incomes.

Finally, most college students join MLM programs only to make a supplemental few hundred dollars a month. In any decent MLM opportunity, such as Vemma, a $5-to-downline-rep ratio is conservative. Therefore, you'll need a downline (which form a diamond shape, not pyramid) of around 50 people – enrolled by anyone, from anywhere in the world the company operates – to earn a (campus) life changing $250 a month. That's not really that tough for someone with a little tenacity, who takes the time to get properly trained, and apply a few extra hours a week to their business.

In fact, even a college student can do it.

Re: MLM Attorney Kevin Grimes: Why Do They Buy? A Key Question in a Pyramid Scheme Analysis

Len Clements — Wed, 03 Apr 2013 13:17:04 -0000

...nor did he ever even suggest they were "compliant."

Re: Breaking MLM News: Numis Network Merges With World Ventures

Len Clements — Tue, 23 Jul 2013 12:41:46 -0000

Will World Ventures reps now have access to numismatic coins?

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

Len Clements — Fri, 13 Sep 2013 14:34:26 -0000

I wish someone would draw a cartoon of Ackman standing in front of the Herbalife building trying to heave a kitchen sink at them.

The only thing I'd change is the 16 point deficit in the the football analogy, which gives Ackman the ability to tie, go into overtime, and still win. 15?

Other than that, I was also going to comment on this Ackman letter to PWC but since I couldn't have said it better myself, now I don't have to. I'll just link to your article. Thanks :-)

Re: Podcast #23: Dave Wood in “The Kitchen”

Len Clements — Thu, 10 Oct 2013 15:31:49 -0000

You're actually on the Comment page (don't know why it displays the index of the interview here). To listen to the interview go to http://www.insidenm.com/pod...

Re: Inside Empower Network

Len Clements — Sun, 20 Oct 2013 13:32:11 -0000

The FTC does not look for the majority of sales from non-affilaites. In fact, they specifically stated in the DSA letter (2004) that they have no such criteria. As I stated in the report, the FTC goes by the motive for purchase. In the case of EN is appears clear that all products above the $25 blogging platform are purchased primarily to meet commission qualification. And yes, this is legally problematic.

I never pursued the "badass" kid issue because he obviously had to enroll under an adult's name. This was just a one time, poorly thought out promotional event.

And besides - do you really want the report to be even LONGER? :-)

Re: Inside Empower Network

Len Clements — Sun, 20 Oct 2013 19:40:06 -0000

There's plenty of examples of that throughout. They even have a policy against using the term "All In", as in "You're a wussie if you don't go All In!" Even after I made Dave Wood aware of this, and he agreed he and Sharpe use the term all the time, it's still in their P&Ps today.