According to an email just sent-out by BurnLounge, the Internet-based, virtual music store has “come to a cooperative agreement with the Federal Trade Commission based on its recent decision to eliminate the network marketing portion of its business.” Said the company:

“This is the first time in recent history that any company has emerged from such charges by the FTC and survived entirely intact,” said D.J. Poyfair, a partner from Shughart Thomson & Kilroy and lead outside counsel for BurnLounge. He added, “The Judge’s ruling allows the company to continue to move forward with its new model unabated and unrestricted.”

“″This is the first time in recent history that any company has emerged from such charges by the FTC and survived entirely intact,” said D.J. Poyfair, a partner from Shughart Thomson & Kilroy and lead outside counsel for BurnLounge. ”

”Network marketing was a unique channel to promote our products, but the strategic decision to voluntarily remove this part of our business was the right decision on all fronts,” said Grant D. Johnson, chairman and chief executive officer, BurnLounge. “With this hearing behind us, we are aggressively moving forward and will focus on our new free model to help fuel the next evolution of business growth to better benefit our employees, artists, partners, and independent retailers.”

BurnLounge executives anticipate a formal statement from the Federal Government in the next couple of days regarding the company’s former business model. Poyfair noted that, “The interaction with the FTC has been professional and fair and has led BurnLounge to make the decision to simplify its model.”

”While we still disagree with the FTC’s contention that our previous model violated FTC statutes; agreement to the stipulation was the only way to protect our retailers and artists while we continue to run our business and work towards a final resolution,” stated Ryan Dadd, co-founder, president, and chief operating officer, BurnLounge. “We can now focus on keeping our retailers’ businesses viable and enhancing our product offerings so our retailers and artists can generate revenue from the sale of higher margin goods.”

We’re not sure if this is true as the FTC has not yet released any information, but we’ll let you know when or if we can confirm it.

On June 8, The Palmetto Scoop broke the news that BurnLounge executives, including former Gamecock star Rob DeBoer, were being sued by the FTC for allegedly operating as a pyramid scheme. Such schemes are a violation of federal law because, by design, a majority of participants end up losing a great deal of money and inevitably cause millions of dollars in consumer injury.

Since then, the company has repeatedly denied the FTC’s allegations, but did alter its business model just over a week ago.

Stay tuned…