Should Medifast be investigated by the Securities and Exchange Commission?
According to former LA Times investigative reporter and bestselling book author William Lobdell’s report in iBusiness Reporting: * Despite being an obvious multi-level marketing operation, as defined by the Federal Trade Commission and others, Medifast and Take Shape for Life officials work hard to avoid the label, perhaps in part because it might tip off investors that the company’s recent sales increases would be difficult to maintain over time (and when jobs return to the economy) and also because some multi-level marketing efforts are often labeled pyramid schemes destine to collapse once the pool of new recruits dries up. Lobdell goes on to suggest that Medifast may be in violation of SEC Rule 10b-5 governing securities fraud: * Whether Medifast needs to disclose it’s a multi-level marketing company to prospective independent sales people and investors is a matter of the Securities and Exchange Commission. According to SEC regulations, it’s illegal … “to make any untrue statemen
