Everything you need to know about the Market America lawsuit

Market America, which has existed for over a decade, is described as a cross between Amazon and QVC. This article talks about the Market America lawsuit and its course over the years.

Market America - an overview

Market America is a multi-level marketing company founded in 1992 by Jr. Ridinger and his wife. Headquartered in North Carolina, it offers a range of products, including cosmetics, personal care products, dietary supplements, and auto care products.

As of 2016, the company has around 800 people working for it and had generated a revenue of $791 million. According to their website, they have offices across the globe, including Hong Kong, Indonesia, Australia, and the UK. 

Details of the Market America Lawsuit

In 2017, Chaunjie Yang and Ollie Lan, two distributers for Market America filed a lawsuit against them alleging racketeering. The Market America lawsuit alleges that the company told distributors that they can earn $560,000, but in reality, only those at the top make that kind of money. 90% of sellers receive no payment whatsoever.

The Market America lawsuit also alleges that those who enroll in the scheme have to pay $399 dollars to start and $129 a month. Yang says he lost over $35,000 in the venture. Distributors have to pay $130 and $300 a month to invest in products. They also have to pay to attend events, seminars, and workshops.

The plaintiffs of the Market America lawsuit seek restitution and an injunction for unfair and deceptive practices. The Market America lawsuit also asks that:

• The arbitration provision that distributors sign with Market America is unenforceable.
• Violations by the company under the Racketeer-Influenced and Corrupt Organization Act be penalized.
• False advertising practices by the company should be prosecuted.

Current status

The Market America lawsuit was filed in California in 2017. Later in August, it was transferred to North Carolina as a result of a motion filed by Market America.

The last update on the Market America lawsuit is from 2020, which states that the court proceedings were put on hold till arbitration is completed.

The Market America lawsuit was also combined with another case with Market America, under which future legal filings will be made.

The plaintiffs, Yang and Lan, who filed the Market America lawsuit, had signed various documents with Market America agreeing to arbitration, which is why the court decided on this motion. The agreement to arbitrate essentially denied the plaintiffs the right to take Market America to court. 

Previous lawsuits against the company

Besides the Market America lawsuit, the company has been under the scanner for various other reasons as well.

In 1999, the company was investigated by the SEC for alleged violation of federal securities laws. The allegations against the company state that Market America founder Ridinger, brokered a back door deal with a former stockbroker and failed to disclose the deal to prospective investors.

Ridinger had it arranged so that sales handled by Gilbert Zwetsch, the stockbroker, were split between them. This was between August 1994 to December 1995, when the company’s stocks were being sold publicly. Their distributors and other key players in Market America weren’t informed of this setup.

Under these charges, neither Ridinger nor Zwetsch admitted to any wrongdoing. However, to settle the charges brought by the SEC, they had to collectively pay $1.2 million of illegally obtained funds and a $350,000 fine.

There was also a lawsuit against Market America in 2012, claiming their products contained lead. Ollie Lan says his mother became ill after being exposed to the company’s products.

In 2020, Market America also received a warning letter from the FDC for failure to report side effects caused by the one of company’s supplements. During a 21-day challenge where one had to take the company’s supplements, customers experienced abdominal pains and dizziness for which they had to be hospitalized.

Conclusion

To summarize, Market America has faced a slew of allegations in the course of its history. The Market America lawsuit in question was brought to court in 2017 by Yang and Lan where the allegation was that Market America followed several questionable practices and failed to disclose important financial information.

The case was eventually forced into arbitration as the plaintiffs in the Market America lawsuit had unwittingly signed a document agreeing to the same. It is also important to note the warnings and charges brought by the FDC and the SEC against the company in the past.

The Market America lawsuit is an eye-opener. It enforces the belief that corporations, regardless of size, can brought under the law for breaking and cheating the common man.