International Law

Medifast a Madoff?

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The Maryland Daily Record reports that the shares of Medifast took a nose dive after Barry Minkow issued a 29 page fraud report complied by Robert L. FitzPatrick.

"A report out Tuesday alleging the fastest-growing segment of diet food maker Medifast Inc. is little more than a Ponzi scheme caused the company's stock to drop nearly 30 percent on the day in heavy trading.

The Fraud Discovery Institute, co-founded by convicted felon-turned fraud investigator Barry Minkow, released a 29-page report comparing Owings Mills-based Medifast to disgraced investment manager Bernie Madoff.

The institute also set up a Web site that carried the report, along with another that claims some of Medifast's weight-loss products tested by two labs showed elevated lead levels.

Medifast shares lost $2.16, or 29.67 percent, to close at $5.13 on the New York Stock Exchange. Trading was also heavy throughout the day, with 1.4 million shares trading hands, more than 10 times the daily average.

Repeated attempts to get comment from the company were unsuccessful."

Here is the Minkow's video.

Full post as published by Misleading Advertising Law on February 18, 2009 (boomark / email).