Experts say LuLaRoe gets $4.75 million slap on the wrist, as company eludes admission of any wrong doing

Experts say LuLaRoe gets $4.75 million slap on the wrist, as company eludes admission of any wrong doing

LuLaRoe's longstanding legal battle with the state of Washington has come to an end with a $4.75 million settlement. The office of Washington's attorney general Bob Ferguson filed suit against LuLaRoe on January 23, 2019, naming the controversial multi-level marketing company, founders Mark Stidham and DeAnne Stidham, and their son Jordan Brady in the suit.

Prosecutors alleged that the business “” which hawks colorful leggings and other garments through a network of independent retailers “” was functioning as a pyramid scheme in the state of Washington. LuLaRoe's business model of requiring participants to purchase thousands of dollars of inventory directly from the company left many in debt.

Read more: Inside the life of LuLaRoe's controversial founder, whose small dress business blew up into a leggings empire that's been accused of operating as a pyramid scheme

"This was the first case my office has filed under Washington's anti-pyramid scheme law," Ferguson told Insider in a statement. "This significant monetary payment shows how serious the defendants' conduct was, and most importantly, gets money back into the pockets of people who were deceived by LuLaRoe."

The Washington Anti-Pyramid Promotional Scheme Act passed the state legislature in 2006. The nearly identically-named Anti-Pyramid Promotional Scheme Act was introduced in Congress