Why is Sam Antar Right about USANA? Part I
Image via Wikipedia
Sam E. Antar recently wrote me and stated:
I read your recent blog post entitled, "USANA Health Sciences Pays Off." I respectfully respond to your blog post below: (1) Contrary to your allegation, I have never received a penny from USANA;(2) I was never a party to USANA's lawsuit against Fraud Discovery Institute (FDI) and Barry Minkow;
(3) Because I was not a party to that case, I was not consulted regarding the settlement and had no involvement in it;
(4) Other than what I've read on the internet and in court documents accessed via PACER, I don't know anything about the settlement, including the terms of the confidential settlement agreement.
Barry Minkow should be commended, not criticized.He investigated, researched, and published Fraud Discovery Institute's findings regarding USANA, beat USANA in court on all counts relating to Fraud Discovery Institute's report, got his attorney's fees paid by USANA, and settled for a meaningless injunction.
It's so easy for people to criticize Barry, when they're not paying the legal bills."
First, I agree with Antar that Minkow's strategy was very creative, and that he should be commended.
But, here is the background on my thinking. I do have the highest regard for both Sam and Barry and what they tried to do.
Sean Kelly and I, have been discussing a similar business problem for franchising.
Sean hosts www. unhappyfranchisee.com, and www.franchisepick.com
Franchising has the same problems as MLM, but generally the losses are much higher. But, I am still not in favour of a whine a lot and get paid off model. If it works, then the next time around the mere threat might work!
I have made by objections to greenmail clear to Sean Kelly, precisely because of the nonsense that rip-off report is now getting away with. For example, Ed Marsden now touts some terrible biz op scammers, as "clean".
You start setting yourself up as the entity that can vet for frauds - but, everyone including me can be scammed.
After 20 years an academic studying decision theory, 10 years as a litigation attorney, I have come to the conclusion that it is next to impossible to prevent irrational choice - the best we can do is to minimize the damage of such choices. Which is why I favour the type of business model Tracy Coenen is running over at Pink Truth. She is using her traffic in a creative manner, and her community seems to be healing themselves - despite their financial losses.
I think that the SEC model was a creative idea - but, to engage in short selling was not. The SEC cannot possibly be seen as advancing any of Barry or Sam's financial goals. Had Barry and Sam not done the short selling, the SEC might have looked at the matter differently - don't know.
Interestingly, in Canada there is the possibility of requiring an investigation be done through the competition act - which would certainly be the preferable manner to approach the problem in Canada.
In my next post, I want to expand on some the state and private causes of action available to the participants in MLM.
But my overall goal is to minimize the monetary and psychic damages, while acknowledging that it is virtually impossible to prevent people making irrational choices - especially within our current disclosure model - shining light in dark places sometimes just reflects and blinds us.
