Stream Energy and its marketing arm Ignite again face a class-action lawsuit in a Houston federal court charging that Stream and Ignite sell through a pyramid scheme in violation of federal racketeering laws*. Houston lawyer Scott M.Clearman, who filed the case, says in a worst-case scenario, if Stream has to pay a major settlement, “It could close the company.” *Criminal charges = RICCO = Hardball!

Clearman’s 5-year-old lawsuit against Dallas-based Stream tells a different story. The lawyer charges that the company’s sales setup benefits those at the top. He cites federal racketeering laws* RICCO because, he says, phone and mail were used to perpetrate the fraud in a conspiracy led by Stream and Ignite leaders. *RICCO =Criminal not civil actions.

The recipients of any potential settlement include hundreds of thousands of independent associates who worked for Ignite selling Stream electricity contracts between 2005 and 2011. The original suit was filed back then.

Business experts say the ramifications of this lawsuit are so deep that a Stream loss in the case could wreak havoc across the entire multilevel marketing industry. EDITORS NOTE: BULL SHIT! Chairman and co-founder Rob Snyder tells The Watchdog the suit is “distressing.” The allegations are untrue, he says.

The company is appealing and several Stream officials tell me they expect an appeals court to dismiss the class-action certification. EDITORS NOTE: We’ll WE WILL SEE WITH THE RICCO CHARGES THROWN IN – SEE THE LAWSUIT AGAINST VISALUS!
Snyder says there is no pyramid scheme because the company sells a true product and uses established multilevel marketing systems to build its massive sales force: “We sell electricity, and we pay for word-of-mouth advertising through our associates,” he says.

Clearman’s 5-year-old lawsuit against Dallas-based Stream tells a different story. The lawyer charges that the company’s sales setup benefits those at the top. He cites federal racketeering laws because, he says, phone and mail were used to perpetrate the fraud in a conspiracy led by Stream and Ignite leaders. Although promises of big income gains are made to bring sales people in, at least 25 percent of those who invest to get started in the sales program don’t make their money back, his lawsuit claims. EDITORS NOTE: ABOVE very Interesting and I will bet that at the core of this Legal Shark hit is the coding bonuses and the first round of papers to be filed with the court is, the FTC hit on Fortune High Tech Marketing See  FHTM RICCO!

Stream chairman Snyder explains that it’s natural for sales team leaders at the top of a hierarchy to make more money than low-level associates. “Our leaders build sales organizations, and they get a commission on the sale when our customers use electricity,” Snyder says.  UR ED: True! he should have said those leaders work their tails off to get to the top of the hierarchy!  AND! time and time again if you mathematically model the whole MLM organization IT IS NOT A PYRAMID!!  It is Diamond shaped!!!  People like me come in the and build big organizations
that go poking down out of the bottom of what would be a pyramid. 

The U.S. Chamber of Commerce and other sales organizations have weighed in with a legal brief. They argue that if the case is successful, businesses using multilevel marketing could face a series of challenges from participants who lose money. UR ED. b.s.Not that many use Coding bonuses!

Surprisingly, a staunch critic of pyramid schemes — and someone who once predicted Stream’s selling strategy would collapse under its own weight — now defends the company in this situation.
Southern Methodist University marketing professor Daniel Howard says, “The danger in this lawsuit is that if this goes through, it may ruin an entire industry, and it could bring down some pretty reputable companies as well. EDITORS NOTE: This case is about electrons there and how to sell them there is not a good markup (sales margin on electrons. Electron companies run into problems because of creative ways to create money for leaders!  “Once you have a class-action lawsuit like this saying there’s a racketeering and corrupt influence, it gives an ugly veneer to an entire industry, and that’s not necessarily true.”  EDITORS NOTE: B.S. out of now 6 million Network Marketers less than 5% sell electrons. Most have penchant for consumable solid based products.

The lawyer suing Stream and Ignite points to a $329 entry fee to join the sales program and a $29 monthly fee to host a sales website. He says many never make their money back. He cites dozens of sales recruitment meetings in the lawsuit where promises of great wealth were made to hopeful participants. EDITORS NOTE: I wonder in this lawsuit could have been avoided by Stream following Texas law (Texas Business and Commercial Code Sec. 17.461 Pyramid Promotional Schemes subsection B that say’s Distributors that sign up have one year to get their money back.  The law says Distributors can return product in good shape and get 90% of their money back. Humor! How does a company selling electrons inspect the electrons and make sure they are not dented! :>)

Stream has been riding high. The company started in 2005 and now reports it has 350,000 Texas customers and 200,000 more electricity customers in New York, New Jersey, Maryland, Pennsylvania and Georgia.
Most of the time, the company has stayed out of trouble. The Texas attorney general’s office has only two dozen complaints on file.  UR ED: usually AG's pull the pin and drop a bombshell around 20 complaints! Proably because the Texas PUC. fined the company $94,000 in 2011 for numerous violations relating to contracts, marketing, connections and many other state rules . The Texas AG probably said, that bust was good enough they..... didn't have to do anything!

Another top Stream executive, president Mark Schiro, tells The Dallas News Dave Lieber Watchdog: “We feel strongly that we will ultimately prevail in this case.” The judge’s decision was wrong, he adds. “And nothing has yet to be proven.”Dallas News Follow Dave Lieber on Twitter at @Dave Lieber.  Dave Liebers Body Guard & Assistant

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