system
Given the following post, respond as if you're commenting on Reddit:
human
ELI5: Why isn't Herbalife considered a pyramid scheme by the SEC?
gpt
Because they have skirted the edge of the legal definition of a pyramid scheme by claiming they are selling a product and not just recruiting more salesmen.  But in reality once you are in, they drill home that you need to sponsor massively more and more people to sell the stuff.  And once you have paid, you feel like a chump to just walk away and admit they suckered you.  So you give it a try because...well maybe this will really work.  But it doesn't.  And by that time, you've grown bitter and just want to get away from it and it is too much trouble to try to get your money back and you tell yourself it was worth the money you spent to learn that lesson.  
  
And while that may be true, they still have your cash.  Multiply that across the globe and boom - Herbalife is rolling in the shit while you are left feeling like you were mugged.