An investor in shares of LifeVantage Corp (NASDAQ:LFVN ) filed a lawsuit in the U.S. District Court for the District of Connecticut over alleged violations of Federal Securities Laws by LifeVantage Corp in connection with certain allegedly false and misleading statements made between January 1, 2009 and February 19, 2018.

Sandy, UT based LifeVantage Corp is a science-based network marketing company that focuses on helping people achieve their health, wellness and financial independence goals.

According to the complaint the plaintiff alleges, that the defendants violated Federal Securities Laws. Mores specifically, the plaintiff claims that LifeVantage and its Chief Executive Officer Darren Jensen, Chief Sales Officer Justin Rose, and Chief Marketing Officer Ryan Goodwin are operating an illegal pyramid scheme in violation of the federal Racketeer Influenced & Corrupt Organizations (RICO) Act, federal securities laws, and the Connecticut Unfair Trade Practices Act.

According to the lawsuit, LifeVantage sells distributorships which Defendants market as the business opportunity using sales pitches promising wealth and business independence. Defendants’ compensation program encourages distributors to recruit others into the system with the same promises of wealth and business independence. Distributors pay money to participate in the business opportunity, which funds LifeVantage’s payments and bonuses to other distributors. Despite LifeVantage’s claims of retail sales, little money comes in to the system from actual retail users of LifeVantage products disconnected from the business opportunity or recruitment. Instead, it is believed that the majority of the company’s retail sales are monthly sales made to distributors who purchase LifeVantage’s products mainly in order to participate in the compensation program and remain eligible to receive bonuses.