Business
Supplement Company Herbalife Sees Pyramid-Scheme Suit Tossed
CHRISTOPHER WEBER, Associated Press
LOS ANGELES (AP) — A judge dismissed a lawsuit by Herbalife shareholders who claimed that the business structure and marketing practices of the weight loss and nutritional supplements company violated the law and that they lost money because it amounts to a pyramid scheme.
Plaintiffs did not show that accusations by activist investor Bill Ackman proved fraud by Herbalife, U.S. District Judge Dale Fischer in Los Angeles wrote in his ruling Tuesday.
Ackman, who runs Pershing Square Capital Management, bet heavily against the company’s stock, describing Herbalife as a pyramid scheme.
Because no fraud was proven, the judge said, the shareholders can’t show that losses they suffered were caused by the company’s perceived misrepresentations.
Herbalife said it welcomed the judge’s decision.
“We are confident in the strong fundamentals of our business model,” Julian Cacchioli, a company spokesman, said in a statement.
Shareholder Abdul Awad sued and later was joined by the Oklahoma Firefighters Pension and Retirement System and the City of Atlanta Firefighters’ Pension Fund. A lawyer for the pension funds, Maya Saxena, said Wednesday that her clients were considering whether to amend the complaint.
Fischer gave the investors until April 8 to make revisions.
The case relied heavily on accusations made by Ackman in a three-hour presentation in New York last year. He focused on Herbalife’s “nutrition clubs,” private settings where Herbalife distributors sell the company’s products — such as weight-loss shakes — and recruit new members.
Ackman said that because the clubs run by Herbalife’s distributors focus on recruiting instead of selling products, the clubs are by definition a pyramid scheme.
He repeatedly tried to persuade other investors to bet against Herbalife, most memorably in a shouting match with billionaire investor Carl Icahn on live television in January 2013. Icahn has defended Herbalife.
Herbalife has vigorously denied Ackman’s arguments and says it operates like a multi-level marketing company similar to Avon, Amway and Mary Kay.
Nutrition clubs have become an increasingly lucrative business model for Herbalife in the last 10 years, with more than 4,000 operating in the U.S. alone, according to the company.
Ackman alleged that those attending nutrition clubs were not actually consumers of the products. Instead, they were often recruits to become nutrition club operators of their own. These recruits should not be thought of as customers, but rather the next layer in the pyramid, he said.
Pyramid schemes are illegal because they eventually collapse once there are no more people to recruit.
Copyright 2015 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
Activism
Oakland Post: Week of December 24 – 30, 2025
The printed Weekly Edition of the Oakland Post: Week of – December 24 – 30, 2025
To enlarge your view of this issue, use the slider, magnifying glass icon or full page icon in the lower right corner of the browser window.
Activism
Lu Lu’s House is Not Just Toying Around with the Community
Wilson and Lambert will be partnering with Mayor Barbara Lee on a toy giveaway on Dec. 20. Young people, like Dremont Wilkes, age 15, will help give away toys and encourage young people to stay in school and out of trouble. Wilkes wants to go to college and become a specialist in financial aid. Sports agent Aaron Goodwin has committed to giving all eight young people from Lu Lu’s House a fully paid free ride to college, provided they keep a 3.0 grade point average and continue the program. Lu Lu’s House is not toying around.
Special to the Post
Lu Lu’s House is a 501c3 organization based in Oakland, founded by Mr. Zirl Wilson and Mr. Tracy Lambert, both previously incarcerated. After their release from jail, they wanted to change things for the better in the community — and wow, have they done that!
The duo developed housing for previously incarcerated people, calling it “Lu Lu’s House,” after Wilson’s wonderful wife. At a time when many young people were robbing, looting, and involved in shootings, Wilson and Lambert took it upon themselves to risk their lives to engage young gang members and teach them about nonviolence, safety, cleanliness, business, education, and the importance of health and longevity.
Lambert sold hats and T-shirts at the Eastmont Mall and was visited by his friend Wilson. At the mall, they witnessed gangs of young people running into the stores, stealing whatever they could get their hands on and then rushing out. Wilson tried to stop them after numerous robberies and finally called the police, who Wilson said, “did not respond.” Having been incarcerated previously, they realized that if the young people were allowed to continue to rob the stores, they could receive multiple criminal counts, which would take their case from misdemeanors to felonies, resulting in incarceration.

Lu Lu’s House traveled to Los Angeles and obtained more than 500 toys
for a Dec. 20 giveaway in partnership with Oakland Mayor Barbara
Lee. Courtesy Oakland Private Industry,
Wilson took it upon himself to follow the young people home and when he arrived at their subsidized homes, he realized the importance of trying to save the young people from violence, drug addiction, lack of self-worth, and incarceration — as well as their families from losing subsidized housing. Lambert and Wilson explained to the young men and women, ages 13-17, that there were positive options which might allow them to make money legally and stay out of jail. Wilson and Lambert decided to teach them how to wash cars and they opened a car wash in East Oakland. Oakland’s Initiative, “Keep the town clean,” involved the young people from Lu Lu’s House participating in more than eight cleanup sessions throughout Oakland. To assist with their infrastructure, Lu Lu’s House has partnered with Oakland’s Private Industry Council.
For the Christmas season, Lu Lu’s House and reformed young people (who were previously robbed) will continue to give back.
Lu Lu’s House traveled to Los Angeles and obtained more than 500 toys.
Wilson and Lambert will be partnering with Mayor Barbara Lee on a toy giveaway on Dec. 20. Young people, like Dremont Wilkes, age 15, will help give away toys and encourage young people to stay in school and out of trouble. Wilkes wants to go to college and become a specialist in financial aid. Sports agent Aaron Goodwin has committed to giving all eight young people from Lu Lu’s House a fully paid free ride to college, provided they keep a 3.0 grade point average and continue the program. Lu Lu’s House is not toying around.
Activism
Desmond Gumbs — Visionary Founder, Mentor, and Builder of Opportunity
Gumbs’ coaching and leadership journey spans from Bishop O’Dowd High School, Oakland High School, Stellar Prep High School. Over the decades, hundreds of his students have gone on to college, earning academic and athletic scholarships and developing life skills that extend well beyond sports.
Special to the Post
For more than 25 years, Desmond Gumbs has been a cornerstone of Bay Area education and athletics — not simply as a coach, but as a mentor, founder, and architect of opportunity. While recent media narratives have focused narrowly on challenges, they fail to capture the far more important truth: Gumbs’ life’s work has been dedicated to building pathways to college, character, and long-term success for hundreds of young people.
A Career Defined by Impact
Gumbs’ coaching and leadership journey spans from Bishop O’Dowd High School, Oakland High School, Stellar Prep High School. Over the decades, hundreds of his students have gone on to college, earning academic and athletic scholarships and developing life skills that extend well beyond sports.
One of his most enduring contributions is his role as founder of Stellar Prep High School, a non-traditional, mission-driven institution created to serve students who needed additional structure, belief, and opportunity. Through Stellar Prep numerous students have advanced to college — many with scholarships — demonstrating Gumbs’ deep commitment to education as the foundation for athletic and personal success.

NCAA football history was made this year when Head Coach from
Mississippi Valley State, Terrell Buckley and Head Coach Desmond
Gumbs both had starting kickers that were women. This picture was
taken after the game.
A Personal Testament to the Mission: Addison Gumbs
Perhaps no example better reflects Desmond Gumbs’ philosophy than the journey of his son, Addison Gumbs. Addison became an Army All-American, one of the highest honors in high school football — and notably, the last Army All-Americans produced by the Bay Area, alongside Najee Harris.
Both young men went on to compete at the highest levels of college football — Addison Gumbs at the University of Oklahoma, and Najee Harris at the University of Alabama — representing the Bay Area on a national level.
Building Lincoln University Athletics From the Ground Up
In 2021, Gumbs accepted one of the most difficult challenges in college athletics: launching an entire athletics department at Lincoln University in Oakland from scratch. With no established infrastructure, limited facilities, and eventually the loss of key financial aid resources, he nonetheless built opportunities where none existed.
Under his leadership, Lincoln University introduced:
- Football
- Men’s and Women’s Basketball
- Men’s and Women’s Soccer
Operating as an independent program with no capital and no conference safety net, Gumbs was forced to innovate — finding ways to sustain teams, schedule competition, and keep student-athletes enrolled and progressing toward degrees. The work was never about comfort; it was about access.
Voices That Reflect His Impact
Desmond Gumbs’ philosophy has been consistently reflected in his own published words:
- “if you have an idea, you’re 75% there the remaining 25% is actually doing it.”
- “This generation doesn’t respect the title — they respect the person.”
- “Greatness is a habit, not a moment.”
Former players and community members have echoed similar sentiments in public commentary, crediting Gumbs with teaching them leadership, accountability, confidence, and belief in themselves — lessons that outlast any single season.
Context Matters More Than Headlines
Recent articles critical of Lincoln University athletics focus on logistical and financial hardships while ignoring the reality of building a new program with limited resources in one of the most expensive regions in the country. Such narratives are ultimately harmful and incomplete, failing to recognize the courage it takes to create opportunity instead of walking away when conditions are difficult.
The real story is not about early struggles — it is about vision, resilience, and service.
A Legacy That Endures
From founding Stellar PREP High School, to sending hundreds of students to college, to producing elite athletes like Addison Gumbs, to launching Lincoln University athletics, Desmond Gumbs’ legacy is one of belief in young people and relentless commitment to opportunity.
His work cannot be reduced to headlines or records. It lives on in degrees earned, scholarships secured, leaders developed, and futures changed — across the Bay Area and beyond.
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