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MLM Legal

MLM companies and independent contractors (distributors) must understand the local, national and international laws that regulate the MLM and direct selling industry. In the United States, the direct selling industry is regulated by Federal Trade Commission rulings that influence commission plans or income claims. The sale of products is also regulated for all industries such as the three day return rate. In international legal cases, national and local laws vary.

  • September 11, 2017

    A Castle Built on Sand

    Challenges and opportunities for network marketing in China

    This article was written by Mark Schaub (International partner), Atticus Zhao (Senior associate), and David Hong (Foreign law consultant) and reposted with permission. China is the promised land for many international network marketing companies. China has what network marketing companies thrive on: co... Read more ›

  • March 26, 2017

    Eight Tips for Avoiding Legal Battles

    No one can tell you with certainty how to stay out of the crosshairs of regulatory bodies. No two rulings (or settlements) are identical. As circumstances change, regulators change their focus. But we see regulators going after certain practices again and again, and from that we can draw some common sense con... Read more ›

  • August 13, 2016

    The Case for a Chief Compensation Officer

    In the August issue of Direct Selling News, InfoTrax Systems Vice President of Commissions Operations, Kenny Rawlins, makes a compelling argument for the inclusion of a chief compensation officer (CCO) on the executive team of every direct selling company. Last year’s Vemma injunction and the recent Herb... Read more ›

  • August 1, 2016

    Ackman’s crusade against Herbalife—in plain English

    The recent $200 million Herbalife settlement leaves us with some open questions about how Herbalife will do in the stock market and what Bill Ackman will do with his short position. In case you’re not entirely familiar with the concept, a short position is when a broker sells you a stock that they do not... Read more ›

  • July 21, 2016

    FTC Settlement with Herbalife—OMG!

    Network marketing is in the midst of a rapidly advancing Orwellian era. It’s been slow to develop, starting in 1996 when the Ninth Circuit Court of Appeals issued its decision in Webster v. Omnitrition, but it’s snowballed in the past two years.  Today the snowball grew exponentially with the announcemen... Read more ›

  • July 21, 2016

    Herbalife to Restructure Operations, Pay $200 Million to Settle FTC Charges

    Herbalife International of America, Inc., Herbalife International, Inc., and Herbalife, Ltd. will restructure their U.S. multi-level marketing business operations and pay $200 million to compensate consumers to settle the FTC complaint that the Herbalife companies deceived consumers into believing they could ... Read more ›