The William Ackman / Pershing Square Capital Management attack team is at it again, taking on another Herbalife Ltd. (NYSE:HLF) independent distributor.
This time the target is Russell Gain, a Herbalife Ltd. (HLF) distributor since the 2000s and a member of the President’s team.
In the Pershing Square operated website, HerbalifePyramidScheme.com, Gain is profiled using words and phrases that would get the hair to stand on the back of many compliance executives.
Herbalife Ltd. (NYSE:HLF) distributor Gain on ’60 minute money’
For instance, the Ackman-backed web site notes that Gain used his own web site, titled “60 Minute Money,” sought to recruit new Herbalife distributors by offering a “foolproof” system for achieving “a better financial future” working from home. The words “foolproof” are akin to a guarantee of success, a regulatory no-no in the investing world. Telling visitors to his 60 Minute Money website that they “can secure a better financial future today!” the Ackman attack points out Gain sought to convince Herbalife recruits that he can help them “Start [Their] Own Foolproof Home-Based Business.”
Gain on guaranteed money via Herbalife Ltd. (NYSE:HLF)
Gain apparently boldly claimed that his “proven step-by-step system” can teach new recruits how to make up to “$2,500/month part time” or “$5,000 or more per month” full time. It is unclear how a sales system can guarantee success in a forum that is indifferent to the independent sales skills of those reading the ad.
Gain further explained on his independent Herbalife Ltd. (NYSE:HLF) recruitment website the apparent ease with which one can become a successful Herbalife distributor, claiming his “turnkey system is so simple that even if you are an Internet beginner, you can be successful. . . . Success is possible for anyone with our program.”
The Pershing Square website said that “Gain continued his use of exaggerated income claims” in another iteration of the 60 Minute Money website, telling potential recruits he has “developed a multi-million dollar business now generating sales at an annualized rate of over $5 million all from my home” and that “[p]eople from all over the world now participate in [the 60 Minute Money] program and are building similar businesses for themselves from their home.”
Pershing Square notes that Gain targeted those in difficult circumstance by persuading individuals who have been recently laid off from work to “Take Control of [Their] Destiny” and “get excited” because they “have the ideal opportunity to take action right now” by using Gain’s 60 Minute Money system to become a Herbalife distributor.
Consumers on Herbalife Ltd. (NYSE:HLF) and 60 Minutes Money
And the war of words between Bill Ackman attempting to tear down Herbalife continues as Ackman notes two complaints filed by consumers allege “deceptive business practices.”
- In one complaint, dated March 19, 2005, a self-described member of Herbalife’s Global Expansion Team (GET), Rob Phillips, says that, “Two years ago I fell for the Herbalife opportunity. This was a group, now as large as David Beven [sic], called 60 Minute Money, run from South Florida, initiated a few years ago by Russell Gain . . . .” Phillips notes that 60 Minute Money is, in fact, an Herbalife business, despite its lack of Herbalife branding. “This is a further scam to conceal the fact it’s Herbalife.” Phillips continues, stating, “I was conned all the way, and now both my wife and I are ill, and splitting up because of the pressure. It’s fine until the investment money runs out, then you are left to rot. . . . Please look into this organisation and warn people they need $200,000 minimum to make it work.”
- In a second complaint, dated March 22, 2005, Howard from Yorkshire, U.K., explains that,notwithstanding the lack ofHerbalife branding on Gains’ website, 60 Minute Money is merelyan Herbalife recruiting business that attempts to persuade recruits topurchaseHerbalife products at a costsignificantly greater than what those products sell for on the open market. Howard says, “I came across the 60 minute business from a work at home link and parted with £27 for the cd. I worked through all the testimonials and recognised the signs ( If it looks too goodto be true, it always is). When after spending a couple of hours of listening to Russel [sic] Gain’s amateurish presentation, I finally got the confirmationthrugh [sic] the link to ‘View our products’ andHerbalife was a [sic] revealed. What? I’ve wasted my time & money to find that it’s the same tired old crap. I had hoped it was something new and exiting [sic]. The first product I checked out wasGlucosamine Sulphate, available anywhere atafraction [sic] of the price they charge. No wonder they say that 78% of the priceis paid out in commissions.”
All photos via HerbalifePyramidScheme.com