TelexFree confirmed this week it is under investigation by the U.S. Securities and Exchange Commission, though company lawyers declined to share details about a recent subpoena summons. The Massachusetts-based direct selling company released a statement to its affiliates, emphasizing a policy of cooperation with state agencies.
The company's "Policy Regarding Regulatory Communication," posted to its backoffice, states TelexFree cooperates with all state agencies. It notes that direct selling companies, including those in Massachusetts, routinely file documentation and respond to requests for information. TelexFree distinguishes these informational inquiries from "regulatory enforcement actions," claiming it has never been the subject of the latter in any state.
TelexFree provided information to the Massachusetts Division of Securities in April 2013. The company was again asked to provide information and be available for interview in January 2014. It affirmed its commitment to continued cooperation with all agencies.
This official stance signals a change from earlier denials. Steve Labriola, a company figure, previously told affiliates there was "no investigation." He had also promised to inform them if "something was going on." The current statement offers a "no comment" approach regarding specific regulatory interactions.
The carefully worded release does not offer new facts for affiliates. It does not disclose the specific documents the SEC recently requested from the company. TelexFree maintains its privacy as a company, stating it will not publicly discuss its regulatory filings or interactions beyond its official statement.