Indeed, the F.T.C.’s move against Vemma has caused both sides in the Herbalife battle to claim vindication. Although the F.T.C. has been investigating Herbalife for some 17 months, Timothy S. Ramey, a stock analyst and Herbalife bull, raised his price target for the company, saying Vemma’s business model was clearly different from Herbalife’s. Meanwhile, Ackman prepared a 29-slide deck with side-by-side comparisons of all the ways, in his view at least, Herbalife’s business model was exactly like Vemma’s.

So which is it?

As Parloff notes in his article, “The Siege of Herbalife,” there is no law defining a pyramid scheme, nor are there even any regulations on the books. The simple common-sense definition is that a pyramid scheme is a business in which recruits make a payment for the right to recruit others into the network, and whose revenues are more dependent on recruitment than on selling a product.

But it turns out to be so much more complicated. In 1979, the F.T.C., after investigating Amway, a multilevel marketing company with a vast product line, decided that the company’s business model passed muster — even though recruitment was at the heart of it — because it claimed to take certain steps that (among other things) supposedly showed that its recruits were selling the company’s products to real customers, not just to other recruits. Very quickly, other multilevel marketing companies adopted the “Amway rules” to stay on the right side of the F.T.C.

Yet the Amway rules have never been codified into regulation — they’re really more like suggestions — nor have they ever been proved to mitigate the harm pyramid schemes do in taking advantage of recruits or lying to them about the potential to get rich. (A vast majority of those who sign up for pyramid schemes lose money, sometimes lots of money.)