Len Clements, a leading network marketing expert, just published Market Wave Alert #73, which offers further analysis and commentary on the "Fraud Discovery Institute" smear campaign against USANA Health Sciences and, Mr. Clements emphasizes, against the entire network marketing industry.
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Here is a copy of Market Wave Alert #73 (please read the copyright and legal information at the bottom of the Alert before you copy it yourself). There is no affiliate program so that is not an affiliate link.
Market Wave Alert #73
by Len Clements
FDI Continues to Attack Usana MarketWave Issues Counterstrike
April 17th, 2007
Usana Health Sciences (NASDAQ:USNA) has announced that the Securities & Exchange Commissions has begun an informal investigation into the company's business practices. The inquiry is related to the recent report issued by the Fraud Discovery Institute (FDI) regarding Usana, which was sent to the SEC, FBI and IRS. The Wall Street Journal published an article last month about the report which gave it additional credibility and exposure resulting in a 15% drop in Usana's share price the day the report was issued.
According to an Associated Press report, David Wentz, president of Usana, responded, "We believe that this is a routine inquiry made in response to a series of false and defamatory statements about our company that have appeared on the Internet and in the mass media."
Since then there have also been a number of class action law suits filed on behalf of Usana investors.
As was noted in MarketWave Alert #71 (3/15/07) the FDI is directed by Barry Minkow, who spent almost 7 1/2 years in prison after being convicted on 57 counts of fraud and conspiracy in the 1980s. Minkow has continued his attacks on Usana by issuing additional reports and posting anti-Usana videos on YouTube.
According to Minkow, Usana is in violation of SEC disclosure law and is an illegal pyramid scheme.
Usana has already filed a defamation lawsuit against the Fraud Discovery Institute, and has formally requested that the SEC investigate Barry Minkow. Minkow is a "short seller" who, just previous to publishing his negative report, was in a position to profit if Usana's stock price were to drop significantly.
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Commentary:
Most network marketers are a fickly, flighty bunch who spook easily (sans the more sophisticated MarketWave Alert subscriber, of course). There are also far too many among us who seem to delight in the misfortunes of our competitors and tend to exploit their dilemmas with great glee. Often times the subject is deserving of their predicament and really was just "asking for it" (i.e. SeaSilver, The Tax People, Equinox, etc.). This is not one of them. Indeed, should a company like Usana ever be declared a pyramid scheme, we're all in trouble. It's best we root for them than hoot at them.
So before we all start planning our Usana-folk harvest, or if you are Usana-folk start searching for "safer" pastures, let's be clear, and fair, about this. The SEC "investigation" really is just an informal inquiry, which is a routine reaction to the allegations made by the FDI (and astonishingly given credence by the Wall Street Journal). Given that the FDI report is nothing more than deceptively well packaged baloney, which will, as you'll soon see, easily writher under scrutiny, there is little likelihood that any significant damage will be caused by it, to Usana or to network marketing in general. That is, unless WE let it!
Let's all just relax, and let it go where all baloney eventually goes after it's been consumed.
In the mean time, I have written a detailed 28 page rebuttal to the accusations made by Minkow and his FDI. Even if you are not a Usana distributor I'd recommend you check it out. Since, as I said, what the FDI has accused Usana of, and the WSJ and SEC has given at least some credibility to so far, very likely applies to your company as well! This rebuttal report is a great primer (if I do say so myself) on how to address common MLM objections/concerns such as: market saturation; pyramid schemes; overpriced products; and, 99% failure rates.
Download the Rebuttal Report HERE or go to the Articles section at MarketWaveInc.com.
I'm assuming, as networking professionals, you are all confident enough in your own MLM programs to accept information that is in defense of a competitor. Your feedback is appreciated (good or bad). I'll keep you posted on how this case develops.
Len Clements
MarketWave, Inc.
P.S. For the record, I have never owned Usana stock, I am not a Usana distributor, nor was I paid to produce this report.
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MarketWave Alerts(tm) is copyrighted material. Alerts may be freely copied or forwarded in their entirety only under the condition that they not be edited or revised in any way, the MarketWave web site address be included, and the non-subscriber recipient be agreeable to receiving it. It is the belief of MarketWave that the information presented is accurate and truthful as of the date of the Alert. Any and all commentary is the expressed opinions, views and beliefs of Len Clements protected under the U.S. Constitution. Len Clements is not an attorney nor should any part of any Alert be construed as legal advice, nor should it replace the advice of competent legal council.
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END OF MARKETWAVE ALERT #73
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Click here to go to the Market Wave web site and subscribe to the Market Wave Alert (opens a new window). It's FREE! There is no affiliate program so that is not an affiliate link.
