Allegations of pyramid scheme business models
Brattle has extensive experience analyzing multilevel marketing (MLM) compensation models, with a focus on nutrition, supplement, and cosmetic firms using the direct selling model. Our team has been involved in many litigations and investigations that have required analyses of customer-level data. Based on these analyses, we have assessed whether a company’s compensation model has characteristics of a pyramid scheme (as opposed to a legitimate MLM model) and whether participants were misled about their earning prospects. In addition, we have assisted companies conducting internal investigations of their MLM compensation models, and have provided support to academics who have presented their findings to regulators.