Monday, February 19, 2018
Andrew Kochanowski
SOUTHFIELD, MI (BusinessWire) – Sommers Schwartz, P.C. senior shareholder Andrew Kochanowski announced today that the firm has filed a securities class action lawsuit against LifeVantage Corp. (“LifeVantage”) (NASDAQ: LFVN) and certain of its executives. The action, which is captioned Smith v. LifeVantage Corp. et al., Case No. 18-cv-00135 (D. Conn.), asserts claims under the Securities Exchange Act of 1934 and the Federal Securities Act of 1933 on behalf of purchasers of the LifeVantage “business opportunity” during the period of January 1, 2009 through the present (the “Class Period”).
The Complaint alleges that LifeVantage and its Chief Executive Officer Darren Jensen, Chief Sales Officer Justin Rose, and Chief Marketing Officer Ryan Goodwin (the “Defendants”) are operating an illegal pyramid scheme in violation of the federal Racketeer Influenced & Corrupt Organizations (RICO) Act, federal securities laws, and the Connecticut Unfair Trade Practices Act.
According to the lawsuit, LifeVantage sells distributorships which Defendants market as the business opportunity using sales pitches promising wealth and business independence. Defendants’ compensation program encourages distributors to recruit others into the system with the same promises of wealth and business independence. Distributors pay money to participate in the business opportunity, which funds LifeVantage’s payments and bonuses to other distributors. Despite LifeVantage’s claims of retail sales, little money comes in to the system from actual retail users of LifeVantage products disconnected from the business opportunity or recruitment. Instead, it is believed that the majority of the company’s retail sales are monthly sales made to distributors who purchase LifeVantage’s products mainly in order to participate in the compensation program and remain eligible to receive bonuses.
If you wish to serve as Lead Plaintiff for the federal securities law claims alleged in the Complaint, you must file a motion with the Court no later than April 19, 2018. Those claims are brought on behalf of all purchasers of the LifeVantage “business opportunity” who experienced a financial loss as a result of their LifeVantage distributor enrollment (the “Class”).
Any member of the proposed Class may move the Court to serve as Lead Plaintiff through counsel of their choice or may choose to do nothing and remain a member of the proposed Class.
To learn how class action lawsuits help consumers and investors recover financial losses from illegal pyramid schemes, please watch this informative video:
How Class Action Lawsuits Help Those Cheated by Pyramid Schemes | Sommers Schwartz, P.C.