Recently there was a television shootout between Carl Icahn and Bill Ackman over is Herbalife a pyramid scheme. Icahn is a massive jerk, but Ackman bought $1 billion of short stock on borrowed money of Herbalife (approx. 20% of company). Ackman announced that he bought short because he thinks that Feds will find that Herbalife operates a pyramid scheme and is not a multi-level marketer. A MLM involves recruiting sellers to sell the products but is not the primary source of revenue. A pyramid scheme is when your primary source of income is the recruitment and not the product sales. Main recruitment tool now is nutrition clubs which started in 1999 in Mexico. Latinos are a major source of buyers/sellers.
It sounds like the Feds looked the other way on this (fear of upsetting Latinos ???) and now Ackman has highlighted the concern, even if he did it for the wrong reason. Article states that U.S. Senators are now considering issue of when is a MLM a pyramid, in part, because of Elizabeth Warren's election. Not sure that I would give credit to Warren, I think Ackman's action on top of Madoff has lead to sunlight observation. Overall, it sounds like the Feds (FTC in particular) can't do their job right until the losses mount up such that they can no longer be ignored. And sounds also a little bit of fear of being called racist.