Saturday / May 21. 2022
menu-logo menu-logo
brand-logo
Subscribe
Subscribe
Saturday / May 21. 2022
  • Read
    • Daily News
      • Financial
      • Insights
      • U.S.
      • International
    • Cover Stories
    • Feature Articles
    • Company Spotlights
    • Exclusive Interviews
    • Executive Announcements
    • Forward Thinking
    • New Perspectives
    • Working Smart
    • From the Publisher
    • Digital Issue
  • Listen & Watch
    • Direct Approach
    • Iconic Insights
    • The DSN Podcast
  • Attend
    • Direct Selling University
    • Global Celebration
  • Achieve
    • Global 100 List
    • CCR Program
    • Best Places to Work
    • Bravo Awards
    • Legends
  • Join
    • Membership
    • VIP Community
  • Research
    • Digital Momentum Index
    • Stock Watch
    • Stock Ticker
    • Supplier Directory
    • Resources
  • About
    • About DSN
    • Subscribe
    • Advertise
    • Store
    • Connect
  • Search
Subscribe

Vemma Regains Partial Control of Business; Judge Appoints Federal Monitor

BY DSN Staff | September 19, 2015 | read / Daily News

A federal judge has returned partial control of Arizona-based Vemma Nutrition Co. back to the company’s management team, by granting only part of the preliminary injunction sought by the Federal Trade Commission.

The 10-year-old company essentially had been shut down since Aug. 24, when the FTC served Vemma with a temporary restraining order that it obtained on an ex parte basis. That TRO had come with the appointment of a temporary receiver to run the business and a freeze on the assets of the company as well as the other named defendants: CEO B.K. Boreyko and top distributors Tom and Bethany Alkazin. U.S. District Court Judge John J. Tuchi heard arguments related to the FTC’s request for a preliminary injunction on Sept. 15. He issued his ruling approximately one hour before the temporary restraining order was set to expire on Sept. 18.

Under the preliminary injunction, the judge is permitting Vemma to resume some operations within a set of restrictions. For example, the defendants are prohibited from engaging in a marketing program that pays compensation for recruiting new members; encourages or incentivizes members to make purchases to maintain eligibility for bonuses, rewards or commissions; pays any compensation related to the purchase or sale of goods or services unless the majority of such compensation is derived from sales to or purchases by persons who are not members of the marketing program; or constitutes a pyramid scheme.

They also are prohibited from making any material misrepresentations, including those related to income opportunities. In any instance in which the company makes an income, profit or sales volume claim, it must clearly and conspicuously disclose: the number and percentage of members who have made a profit through their participation; the beginning and ending dates of when the represented earnings, profits or sales were achieved; and the average and median amount of profit made by each marketing program member.

As for its marketing materials, the defendants are prohibited from furnishing any materials that contain false or misleading representations and must give the FTC five days to review any new marketing or sales materials before it is distributed. If the FTC objects to any of the materials, the defendants can’t use them without court approval. The preliminary injunction specifically prevents Vemma from selling affiliate packs and from linking bonuses or bonus qualifying points to an Affiliate’s product purchases, such as through auto-delivery or the Vemma Two & Go program.

The judge lifted the freeze on the defendant’s assets but included restrictions designed to preserve the assets of the defendants. The judge also is replacing the temporary receiver with a monitor, who will observe Vemma’s business practices to ensure they are complying with the terms of the preliminary injunction and monitor how the defendants use assets. He is recommending that the same company that served as the temporary receiver—Robb Evans & Associates LLC, a company specializing in serving as appointed corporate fiduciary that also served as the receiver in the FTC’s case against Fortune Hi-Tech Marketing—remain in the monitor capacity.

The case is the first significant FTC action in the direct selling space since the Ninth Circuit of the U.S. Court of Appeals’ 2014 ruling that BurnLounge Inc. was an illegal pyramid scheme. Executives across the industry are monitoring the case closely to understand the outcomes as the case proceeds.

Posted in Daily News
Related Articles
Coway Reports Q1 2022 Revenue of $730 Million  May 20, 2022

Coway Reports Q1 2022 Revenue of $730 Million 

Read more
LegalShield Partners with NEWITY to Provide Legal Services to Small Businesses  May 19, 2022

LegalShield Partners with NEWITY to Provide Legal Services to Small Businesses 

Read more
Should Virtual Conferences Be a Part of Your Sustainability Plan? May 17, 2022

Should Virtual Conferences Be a Part of Your Sustainability Plan?

Read more
brand-logo
The News You Need.
The Name You Trust.
Subscribe

Breaking global news, emerging trends and powerful stories conveniently curated to help direct selling executives stay informed, engaged and a step ahead.

  • Read
  • Listen & Watch
  • Attend
  • Achieve
  • Research
  • About
  • Connect
5800 Democracy Drive
Suite 100
Plano, Texas 75024
info@directsellingnews.com
Copyright 2022 Direct Selling News | All Rights Reserved
  • Privacy Policy
  • Terms of Use
  • Advertise
  • Subscribe
We use cookies on our website to give you the most relevant experience by remembering your preferences and repeat visits. By clicking “Accept All”, you consent to the use of ALL the cookies. However, you may visit "Cookie Settings" to provide a controlled consent.
Cookie SettingsAccept All
Manage consent

Privacy Overview

This website uses cookies to improve your experience while you navigate through the website. Out of these, the cookies that are categorized as necessary are stored on your browser as they are essential for the working of basic functionalities of the website. We also use third-party cookies that help us analyze and understand how you use this website. These cookies will be stored in your browser only with your consent. You also have the option to opt-out of these cookies. But opting out of some of these cookies may affect your browsing experience.
Necessary
Always Enabled
Necessary cookies are absolutely essential for the website to function properly. These cookies ensure basic functionalities and security features of the website, anonymously.
CookieDurationDescription
cookielawinfo-checkbox-analytics11 monthsThis cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Analytics".
cookielawinfo-checkbox-functional11 monthsThe cookie is set by GDPR cookie consent to record the user consent for the cookies in the category "Functional".
cookielawinfo-checkbox-necessary11 monthsThis cookie is set by GDPR Cookie Consent plugin. The cookies is used to store the user consent for the cookies in the category "Necessary".
cookielawinfo-checkbox-others11 monthsThis cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Other.
cookielawinfo-checkbox-performance11 monthsThis cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Performance".
viewed_cookie_policy11 monthsThe cookie is set by the GDPR Cookie Consent plugin and is used to store whether or not user has consented to the use of cookies. It does not store any personal data.
Functional
Functional cookies help to perform certain functionalities like sharing the content of the website on social media platforms, collect feedbacks, and other third-party features.
Performance
Performance cookies are used to understand and analyze the key performance indexes of the website which helps in delivering a better user experience for the visitors.
Analytics
Analytical cookies are used to understand how visitors interact with the website. These cookies help provide information on metrics the number of visitors, bounce rate, traffic source, etc.
Advertisement
Advertisement cookies are used to provide visitors with relevant ads and marketing campaigns. These cookies track visitors across websites and collect information to provide customized ads.
Others
Other uncategorized cookies are those that are being analyzed and have not been classified into a category as yet.
SAVE & ACCEPT