The feature documentary Betting on Zero follows the Messianic journey of New York businessman Bill Ackman, who has made a $1 billion bet that the publicly traded nutritional supplement company Herbalife is going to collapse.
“Shorting” is a brokerage term which basically means that you stand to make a profit when the stocks fall. Last year’s Oscar winner The Big Short took on this topic through a fictionalized account of the real men who benefitted from the housing crash. Did your parents struggle to keep their home? Well, some dudes made a ton of money while your tías and tíos were scrambling for debt relief. Ted Braun’s Betting on Zero continues to show the twisted workings of how shorting works within our lopsided financial system.
Herbalife is accused by Ackman of being a pyramid scheme where nothing of true value is ever really bought or sold. Instead, he charges, Herbalife affiliates make money only through recruitment. In other words, you make money by making your friends and family become additional distributors, because each person must make an initial investment of $55 – $3,000 to become part of the Herbalife familia. If you get ten of your primos to become distributors, you get a big check. Meanwhile, the shakes, teas, and nutritional supplements expire, are forgotten in the garage, or get tossed in the garbage. And your primos are thousands of dollars poorer.
In the United States, Herbalife has had a deep and devastating effect on the Latino community. Here are the five infuriating facts we learned from watching Betting on Zero at the Tribeca Film Festival.
The Tribeca Film Festival runs from April 13 – 24, 2016. We partnered with Tribeca to give you a behind-the-scenes look at the Latino talent at this year’s fest. Follow our coverage on remezcla.com and tribecafilm.com.
UPDATE 7/15/2016: This morning the Federal Trade Commission announced it reached a settlement with Herbalife. The company agreed to pay $200 million into a consumer relief fund and to restructure its compensation policy for distributors in order to avoid charges of operating an illegal multi-level marketing business, more commonly known as a pyramid scheme. Read more on the settlement here and here.
Herbalife Targets Latinos for Its Pyramid Scheme
Herbalife preys on working class Latinos. The lack of knowledge, inexperience, and aspirations toward the ever-elusive American dream make them perfect prospective recruits.
Selling Herbalife Puts Latinos in Debt
Individual Latino families have lost $8,000 to upwards of $80,000 to Herbalife. And yes, $8,000 is a lot of money for anyone, but it’s particularly debilitating to someone who makes minimum wage, works 60 hours a week, and cares for their families in two continents.
Undocumented Immigrants Are Afraid to Come Forward and Denounce Herbalife
Those who have been swindled do not denounce the company because they feel shame for having been duped; they are embarrassed in front of their friends and family; and they fear exposing their immigration status.
Herbalife Targets High Profile Latinos to Endorse Their Products
Former Los Angeles mayor Antonio Villaraigosa was a proponent of Herbalife and is even featured in one of the company’s promotional videos. Puerto Rican former Surgeon General of the United States Richard Carmona was also a supporter of Herbalife products. Soccer superstar Cristiano Ronaldo had an endorsement deal with the company while Herbalife also infiltrated the US futbol market, acting as a sponsor of the Los Angeles Galaxy.
The Government Has Done Little to Stop Their Predatory Practices
The Federal Trade Commission (FTC) and other government regulatory agencies have done very little in the past few years to stop the company. An official FTC investigation was launched almost two years ago, the results are still pending. It’s been through the work of activists like Chicago’s Julia Contreras, who has worked within her church and has filed lawsuits on behalf of affected members of the community, that attention is starting to be drawn to Herbalife’s exploitative practices.