Is New Balance Off-Balance? New Balance, the Boston-based sneaker maker is being sued over allegations of deceptive advertising, specifically, that its toning shoes create more sculpted legs than traditional walking shoes are not accurate.
The complaint, filed on Monday in the US District Court of Boston, is seeking class action status, and $5 million in damages.
The suit was filed by Bistra Pashamova of California, who claims that she and others like her have been harmed by New Balance. New Balance has promoted its toning shoes with claims that the shoes increase muscle activation by about 27 percent and increase calorie burn by as much as 10 percent with each step. Really?
Probably not. Results from a study completed by the American Council on Exercise, released in the summer of 2010, showed that “toning shoes” do not live up to the claims made by their manufacturers. In fact, the report concluded there were “no statistically significant increases in either exercise response or muscle activation as a result of wearing toning sneakers.”
Additionally, reports of injuries have raised concerns that the shoes, which retail for about $100 a pair, could in fact do more harm than good. You think? I have to ask the obvious question—if this is such a great idea—why are our feet designed to keep us balanced?
Spelter Smelter Helter Skelter. (had to, sorry) Here’s a bit of a whopper—Harrison County, WV circuit judge Thomas A. Bedell, approved a $150 million lawsuit settlement that requires DuPont Co to clean up contamination of the community of Spelter and fund a program to test residents for any illnesses the pollution might have caused. What’s all this about, you ask?
DuPont is alleged to have released cadmium, arsenic and lead from one of its smelters into the community of Spelter, just north of Clarksburg. And you thought your neighbors were bad….
The settlement ends the need for another, Supreme Court-ordered trial over whether residents filed their suit within legal time limits. Which also saves taxpayers some bucks.
Under the settlement, DuPont will pay $70 million and fund a 30-year medical monitoring program that is estimated to cost between $65 million and $90 million.
Is this settlement the proverbial Canary in the Mineshaft? A $2.2 million settlement was recently awarded in a FINRA arbitration against UBS Financial Services, Inc.—the latest in a series of pro-investor rulings against UBS in cases involving Lehman Brothers “Principal Protected” Notes.
The case represents reportedly the seventh consecutive win by claimant investors in cases against UBS arising out of the so-called “Principal Protected” securities. And experts suggest that this could be the tip of the iceberg, because a whole lot of people lost a whole lot of money in so called ‘safe’ investments in the recent financial collapse.
FYI—”Principal Protected” Notes, created by the now-defunct brokerage firm Lehman Brothers, are essentially financial instruments that combine derivatives with fixed income and/or equities, resulting in a product that was supposed to provide the safety of fixed income with the upside of the stock market. At least that is how these products were reportedly pitched to some investors by UBS. Not included in the sales pitch was that fact that Lehman Brothers itself was the sole guarantor of the so-called principal protection.
These structured notes were reportedly marketed to conservative investors seeking preservation of capital, a reasonable yield and the potential for a modest gain in principal. In reality, these types of investments were being used by Lehman Brothers, and other brokerage firms, to help finance their near-term operational shortfalls. In fact, many clients were reportedly never even informed that these were Lehman Brothers products in the first place. In some instances, it was not even apparent from customers’ monthly statements that they owned a Lehman Brothers product, as the products were often listed simply as “LB 100% PPN.” Now that Lehman Brothers is in bankruptcy, it appears that these supposedly “Principal Protected” Notes have little or no remaining value.
While these settlements are good news, the bad news is that UBS and Lehmans are not the only players in the dodgy security game…ever heard of RMK Bond Funds?
Ok—That’s it for this week. See you at the Bar.