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Is life coaching an MLM? – The Truth About Life Coaching

First off – you probably didn’t know this, but MLMs are not regulated by the SEC as an MLM.

It’s important to note that the MLMs that engage in the activities of “life coaching” are not regulated by the SEC.

It’s a good idea to check with someone from the SEC in case you are considering applying.

The following companies are commonly advertised as doing “life coaching” as a business:

Treatments is a California based MLM, whose owner and chief executive (John Chatterton) once boasted that “there are lots of opportunities out there, some are better than others. You must see life coaching first (or something!) to make sure you know what to look for.” (L.B.S. News, 3/8/2010)

Lumosity is an Ohio based (not a California based) MLM that claims their “life coaching” programs are “The ultimate way to transform yourself.” In response to an internal audit of their company, the IRS confirmed that Lumosity is not a MLM, but its parent company, The Lumosity Group, LLC., is registered as a MLM. (Lumosity.com, 3/19/2012)

Mighty-Fit and the MLM, CoStar, is also associated with life coaching. (Mighty-Fit.com, accessed 12/14/2013)

The only way to tell if a company is a MLM or a non-MLM is you can check with your state attorney general.

MLM and the Securities Regulation

It’s common knowledge that MLMs violate federal securities laws because they use the same types of fraud techniques (such as charging a commission to recruit new investors) used by the largest publicly traded hedge funds, pension funds and institutional funds in the world (not to mention the most prestigious hedge fund management schools and hedge funds). When dealing with funds, you have certain legal rights and duties that will allow you to protect your investing funds and your clients while avoiding these types of predatory fund tactics. However, most MLM companies will have a very limited liability. Not all of them, but most of the time.

The SEC also has legal protections to look out for in a company. The SEC has taken action against a few MLMs where they made false claims and misled investors and investors who lost money. It appears that the company was forced to plead guilty to securities fraud and agreed to pay a sizable

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