Montana issues Cease & Desist order against ACN

August 3, 2010 Contact: jboyle@mt.gov
Montana Commissioner of Securities and Insurance Monica J. Lindeen announced the issuance of a Cease and Desist Order and Notice of Proposed Agency Action against ACN, Inc. for allegedly operating a "pyramid scheme." The actions allege ACN lured hundreds of Montanans to join with deceptive claims that members could earn large sums of money through the recruitment of new participants and through the sale of phone services. Also named in the actions are Gregory Provenzano, Robert Stevanovski, Anthony Cupisz and Michael Cupisz, all officers and founders of ACN. ACN is located in North Carolina.

"Pyramid schemes are immensely profitable to a few individuals at the top and a complete loss for almost everyone else," Commissioner Lindeen said. "The actions against ACN and its officers seek to shut down the company's alleged unlawful operation before more people lose their hard-earned money."

The actions allege ACN operates an illegal pyramid scheme that only benefits members if and when they find enough new members to join the scheme. Once enrolled, members who join the program earn compensation for each new person they enlist. The Company attracts new members by claiming “the bottom line in building your ACN business is that you are acquiring customers and sponsoring ‘customer getters’ in order to build a residual income for yourself.”
The actions also allege that the only way an ACN participant can earn compensation is the recruitment of new participants to sell a phone service that is largely not available for use in Montana. Participants are told that if they recruit two qualified team trainers who also then recruit two additional qualified team trainers and each participant acquires 20 customers to purchase a phone service, their income can be as much as $11,000 per month.

The Commissioner’s Office found an overwhelming portion of revenues earned by ACN representatives was derived from participants who must personally buy a telephone service that does not work in many parts of Montana to become managers or recruit new participants into the program. In 2008, ACN recruited 91 Montana participants who paid approximately $61,741.69 to be a part of the program. Only two of the participants made any money, with one participant making $696 and the other making $700. In 2009, ACN recruited over 300 Montana participants who paid approximately $234,813.02 to be a part of the program. ACN’s records indicate a mere $896.86 was paid out in compensation to these participants. ACN’s records indicate participants are located throughout Montana.

Individuals and companies promoting a pyramid promotional scheme in Montana can be fined as much as $10,000 per violation.

Individuals and participants who believe they have been victimized by ACN should contact the Securities Division of the Office of the Commissioner of Securities and Insurance at 1-800- 332-6148.

Montana State Auditor's Office

I see the ACN public relations/spin doctors are hard at work trumpeting the fact the Montana Cease and Desist order was supposedly lifted on 13 September, with the added comment "no fines or penalties were paid and "no alteration to business practices are required"

Anyone happen to come across any official acknowledgement of the "no penalties, no changes" lifting of the C & D ????

edit: double post

I guess that question has been answered:

Quote:

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Regulators drop cease and desist order against ACN

By STUART WATSON / NewsChannel 36 E-mail Stuart: SWatson@WCNC.com
WCNC
updated 9/17/2010 5:47:15 PM ET

CHARLOTTE, N.C. -- Montana Securities regulators have dropped a temporary cease and desist order against Concord-based ACN Inc., but regulators say they will still pursue fines and refunds, charging that ACN is a "pyramid scheme."

Deputy Securities Commissioner Lynne Egan says the cease and desist order never prohibited ACN from doing business in Montana but rather put the company on notice to abide by Montana law.

ACN Executive Vice President Dave Merriman has said the case is the result of a "big misunderstanding" of the company's business model and the company hopes to resolve the case.

ACN held an international training session at Time Warner Arena in downtown Charlotte last weekend, hosting an estimated 20,000 independent sales reps and headlined by Donald Trump. Trump placed ACN's video phone dubbed the Iris 5000 on the NBC program "Celebrity Apprentice."

The company offers the video phone for $129.99 and signs up sales reps for $499 each.
Montana Securities lawyers claim in legal filings that the only way for sales reps to be compensated is to recruit other participants to sell a service that is "not usable in Montana." Merriman says the allegation is a misinterpretation of the company's own data.

Montana officials say the video phone is not usable in most of Montana because very little of the state has high-speed broadband Internet access and ACN sells phone service over the Internet. Merriman says customers have the option of purchasing DSL service through ACN and using the video phone over DSL.

Montana is pursuing fines and refunds by presenting its case before a hearing officer, a lawyer agreed upon by both parties to hear the case.
A telephone conference call has been set for Wednesday, Oct. 6, to schedule a hearing in the case.

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Regulators drop cease and desist order against ACN - Local news - Local news - Charlotte, NC - msnbc.com