Regulators have targeted Gouldd since 1990

Friday, April 21, 2000 | 11:12 a.m.

The nine-month legal battle that concluded Thursday was not the first for Equinox or founder Bill Gouldd, who has butted heads with state regulators before.

In late 1995 attorneys general from 14 states, including Nevada, launched an investigation of the company. In August 1996, Equinox settled with the states, who had claimed distributors were being attracted with unsubstantiated claims of success.

As in the settlement announced Thursday, Equinox admitted no wrongdoing in the 1996 settlement. However, the company agreed to revise its disclosure statements to potential recruits to make it clearer how the Equinox distributor system worked. Equinox also paid $455,000, the cost of the nine-month investigation. Part of the settlement included a policy guaranteeing distributors a 100 percent refund for any unused product within five days of purchase.

Part of the government's foundation in the most recent case against Equinox again included allegations of misleading advertising. Government officials also claimed that many Equinox distributors did not receive full refunds as promised.

Gouldd, a long-time multilevel marketer, also had a personal run-in with the state of California in 1990 while he was the top producing distributor for multilevel marketing firm National Safety Associates.

In September 1990, Gouldd agreed to pay the state of California $75,000 in penalties and costs to settle a consumer protection lawsuit brought by California Attorney General John Van de Kamp. The suit alleged Gouldd had "purported to sell water purification devices when they were really selling the right to recruit distributors," Van de Kamp said in a 1990 statement.

In this settlement, like the two others that followed, Gouldd admitted no wrongdoing. But Nevada officials took pains to point out that, with Thursday's settlement, Gouldd will be out of the multilevel marketing business forever.

"He was definitely one of our biggest concerns," said Tracey Brierly, deputy attorney general with the state of Nevada. "He's done this before, and it was a big concern that even if we were able to shut down this company, he'd go off and start another one."